Amazon Shares plunged more than 10% in extended trading Thursday after the company posted mixed fourth-quarter earnings and raised its 2026 spending forecast to $200 billion.
Here’s how the company fared, compared to estimates from analysts surveyed by LSEG:
- Earnings per share: $1.95 vs. $1.97 estimate
- Revenue: $213.39 billion vs. $211.33 billion estimated
Wall Street was also looking at other key revenue figures:
- Amazon Web Services: $35.58 billion vs. $34.93 billion expected, according to StreetAccount
- Advertising: $21.32 billion vs. $21.16 billion expected, according to StreetAccount
Amazon said it expects capital expenditures to continue rising this year as it aggressively invests in data centers and other infrastructure to meet increased demand for artificial intelligence.
The company projected capital spending would reach $200 billion this year, while analysts expected $146.6 billion, according to FactSet.
“With such strong demand for our existing offerings and core opportunities such as AI, chips, robotics and low-Earth orbit satellites, we expect to invest around $200 billion in capital expenditures across Amazon in 2026, and anticipate a strong long-term return on invested capital,” CEO Andy Jassy said in a statement.
During a conference call with investors, Jassy said the spending would “predominantly” go to AWS, where non-AI workloads are “growing at a faster rate than we anticipated.”
“We have very high demand,” Jassy said. “Customers really want AWS for core and AI workloads, and we’re monetizing capacity as fast as we can deploy it.”
Tech companies have laid out aggressive spending plans on artificial intelligence and have pledged to invest billions. father of google Alphabet said Wednesday that it expects to spend between $175 billion and $185 billion in 2026, while Goal It said its capital expenditures could nearly double from last year to between $115 billion and $135 billion.
Amazon’s cloud computing unit’s revenue rose 24% during the fourth quarter, beating analyst estimates of 21.4% growth. Jassy said it was AWS’s “fastest growth in 13 quarters.”
While Amazon remains the leader in cloud infrastructure, it has been trying to combat the perception that it is losing ground to Google and microsoft in the market. Last week, Microsoft Azure recorded 39% growth. Google’s cloud revenue increased about 48%, the fastest growth since 2021.
For the current quarter, Amazon said it expects sales to be between $173.5 billion and $178.5 billion, representing growth of 11% to 15%. Analysts surveyed by LSEG expected $175.6 billion.
Fourth-quarter net income was $21.19 billion, or $1.95 per share, compared with $20 billion ($1.86 per share) a year ago.
The results come as Amazon continues to reduce its workforce. The company said last week it would lay off about 16,000 corporate employees, after cutting about 14,000 employees last October.
Amazon had 1.57 million employees worldwide at the end of December, an increase of 1% year over year. That figure is primarily made up of its warehouse workforce.
The company’s advertising business continues to operate. Revenue grew 23% year over year to $21.3 billion during the quarter.