Amazon shares plunge after showing USD200b capex plan for 2026
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The news: Amazon shares plunged more than 10% after the company announced plans to spend about USD200 billion ($288 billion) on capital expenditures in 2026, a figure roughly one-third higher than Wall Street had forecast.
The Seattle-based tech giant said spending would rise from nearly USD130 billion in 2025 as it invests heavily in AI infrastructure, data centres and chips.
The context: The outlay not only came in well above the USD144.67 billion analysts had estimated, according to data compiled by LSEG, but also exceeded the capital spending plans of Microsoft and Google.
The numbers: Net income rose to USD77.7 billion in 2025. Despite strong demand for both AI infrastructure and core digital migration workloads, Amazon’s forecast for first-quarter operating income of USD16.5 billion to USD21.5 billion, came in below analyst estimates of USD22.04 billion.
AWS, which accounts for more than 60% of Amazon’s operating profit, posted 24% year-on-year revenue growth in the December quarter to USD35.6 billion. That was the fastest growth in 13 quarters, it said.
Shares fell as much as 10% in after hours trading, before recovering slightly to be 8.1% lower at 4:34pm local time (8:34 AEDT).
What they said: CEO Andy Jassy said in a statement the company was focused on long-term returns from AI, chips, robotics and satellites.
"Stores (are) growing briskly across North America and International, our chips business growing triple digit percentages year-over-year—this growth is happening because we’re continuing to innovate at a rapid rate, and identify and knock down customer problems.
“With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital."
The source: Amazon release
