New York, Feb 6, 2026, 14:48 EST
- Amazon shares slid about 9% after it set out a $200 billion 2026 capital spending plan
- Amazon reported Q4 net sales of $213.4 billion; AWS revenue rose 24% to $35.6 billion
- Big U.S. tech firms are lining up more than $630 billion in AI infrastructure spending this year
Amazon shares fell about 9% on Friday after the company outlined plans to spend about $200 billion in 2026, fanning worries about how quickly artificial intelligence will pay for itself. The spending, known as capital expenditures, or capex, covers items such as data centers, chips and other equipment.
Amazon’s projection adds to a wave of bigger AI budgets from U.S. tech giants, who now aim to pour more than $630 billion into data centers and AI chips this year. Investors expected capex to rise, but the figures are pushing the cloud giants — sometimes called hyperscalers, for their massive computing fleets — toward a more capital-heavy model.
Some analysts said the size of the jump surprised the market. “The magnitude of the spend is materially greater than consensus expected,” analysts at MoffettNathanson wrote, while AJ Bell investment director Russ Mould said “positive surprises may be hard to achieve” for the group. The S&P 500 software and services index has shed about $1 trillion in market value since Jan. 28. (Reuters)
Amazon announced the spending plan alongside fourth-quarter results showing net sales rose 14% to $213.4 billion and AWS revenue climbed 24% to $35.6 billion. Chief Executive Andy Jassy called AWS growth “our fastest growth in 13 quarters” and said, “we expect to invest about $200 billion in capital expenditures across Amazon in 2026.” (Q4 Capital)
Operating income rose to $25.0 billion, Amazon said, even after charges tied to tax disputes in Italy, severance costs and impairments largely related to physical stores. Net income increased to $21.2 billion, or $1.95 per diluted share.
Free cash flow — cash left after capex — fell to $11.2 billion over the last 12 months. Amazon said purchases of property and equipment jumped year on year, reflecting investments in AI.
On the post-earnings call, Jassy defended AWS revenue growth of 24% as slower than Google Cloud’s 48% rise and Microsoft’s Azure growth of 39%, saying AWS is a much larger business. AWS delivered $12.5 billion of operating income in the quarter, half of Amazon’s $25.0 billion total.
If the losses hold, the drop would erase around $200 billion in Amazon’s market value. Amazon trades at about 27 times earnings, Reuters data showed, compared with about 22 for Microsoft and 28 for Alphabet.
Microsoft and Alphabet have also fallen after their earnings reports this season, as investors look past near-term sales growth and toward the bill for AI infrastructure. The comparisons to the dot-com boom have returned in analyst notes, helped by the speed and size of the spending.
That is the downside case: spending rises faster than revenue, cash generation stays thin, and returns take longer than expected to show up. Amazon cautioned that results can be hit by swings in demand, exchange rates, energy prices, interest rates and supply volatility, among other factors.
For the first quarter of 2026, Amazon forecast net sales of $173.5 billion to $178.5 billion and operating income of $16.5 billion to $21.5 billion. The range includes higher Amazon Leo costs as the company scales the business, along with investment in quick commerce and lower prices in its international stores segment, it said.
