Amazon just sent shockwaves through Wall Street. The e-commerce and cloud giant's stock cratered more than 10% in after-hours trading Thursday after the company missed earnings expectations and revealed plans to spend a staggering $200 billion on AI infrastructure in 2026 - roughly 36% higher than the $146.6 billion analysts anticipated. The spending bombshell, coupled with an earnings miss, marks one of the most dramatic post-earnings reactions for a big tech company this earnings season.
Amazon just reset the economics of the AI race, and investors aren't happy about it. The company's shares tumbled more than 10% in extended trading Thursday after CEO Andy Jassy revealed the tech giant plans to pour $200 billion into capital expenditures this year - a figure so massive it sent analysts scrambling to revise their models and competitors reconsidering their own spending plans.
The earnings report itself was a mixed bag. Amazon posted Q4 revenue of $213.39 billion, slightly beating the $211.33 billion analysts expected, according to LSEG data. But earnings per share came in at $1.95, missing the $1.97 consensus estimate. Net income hit $21.19 billion, up from $20 billion a year ago.
What really spooked Wall Street was the spending guidance. The $200 billion capex forecast represents a 36% increase over the $146.6 billion analysts had penciled in, according to FactSet. It's a bet-the-company-scale investment in data centers, AI chips, and cloud infrastructure that Jassy believes will pay off over the long term.
"With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, 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," Jassy said in a statement released Thursday.
