Amazon, the e‐commerce and cloud computing giant, saw its shares tumble more than 10% in after-hours trading following a fourth‐quarter report that delivered a mixed performance. While the company reported a slight beat in revenue, an earnings per share miss and a substantial upward revision of its capital expenditure forecast have captured the market’s attention.
Earnings Performance Against Market Estimates
In a report that highlighted both strengths and challenges, Amazon reported earnings per share of $1.95 compared to analyst expectations of $1.97, alongside revenue reaching $213.39 billion versus the anticipated $211.33 billion. Key segments of its business also posted robust figures, with Amazon Web Services achieving revenue of $35.58 billion (against an expectation of $34.93 billion) and its advertising arm generating $21.32 billion, slightly ahead of the projected $21.16 billion.
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Bold Capital Investment And AI Ambitions
Looking ahead, Amazon announced plans to raise capital expenditures to nearly $200 billion in 2026. This is a significant increase from $131 billion in 2025 and well above analysts’ estimates of roughly $146 billion. CEO Andy Jassy highlighted artificial intelligence, robotics, semiconductor development, and satellite technology as priority areas. A large share of investment is expected to go toward AWS, where demand for both traditional cloud services and AI infrastructure continues to grow. Projects such as the $11 billion AI data center known as Project Rainier illustrate the scale of these ambitions.
Competitive Landscape And Industry Investment Trends
Amazon’s aggressive investment strategy unfolds in a highly competitive environment. Other technology giants are also expanding spending. Alphabet is expected to invest between $175 billion and $185 billion in 2026, while Meta has signaled that its capital expenditures could nearly double to a range of $115 billion to $135 billion. Microsoft’s Azure cloud platform also posted strong growth in the previous quarter, nearing 39%, underscoring the intensity of the race for cloud and AI leadership.
Outlook And Operational Adjustments
For the upcoming quarter, Amazon projects sales between $173.5 billion and $178.5 billion, implying growth of roughly 11% to 15%. Analysts had expected around $175.6 billion. The company also reported net income of $21.19 billion, an improvement from the previous year. At the same time, restructuring efforts continue. Amazon has reduced approximately 30,000 corporate roles over recent periods, although its global workforce of about 1.57 million remains largely supported by warehouse and logistics operations.
Advertising And Cloud Segment Performance
Despite the mixed earnings, Amazon’s advertising division continues to perform steadily, recording a 23% year‐over‐year revenue growth to $21.3 billion. Additionally, the firm’s cloud computing unit saw its revenue expand by 24% against analyst expectations of 21.4%, marking the fastest growth in 13 quarters.
Amazon’s strategic combination of cautious revenue guidance and bold capital expenditure plans underlines its commitment to remaining at the forefront of technological innovation, even as it navigates headwinds in the form of operational adjustments and intensified industry competition.
