Cloud giant Amazon (AMZN) reported its fourth quarter results after the bell on Thursday, as a miss on its Q1 operating income estimate and a massive expansion in capex for 2026 sent shares plunging.
Amazon said it anticipates Q1 operating income of between $16.5 billion and $21.5 billion, below analysts’ expectations of $22.2 billion. On top of that, the company said it will spend upward of $200 billion on capex for the year, a massive jump from the $125 billion Amazon was set to spend in 2025.
“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,” CEO Andy Jassy said in a statement.
For the quarter, Amazon saw earnings per share (EPS) of $1.95 on revenue of $213.4 billion, compared with the $1.96 and $211.5 billion analysts were anticipating according to Bloomberg consensus estimates.
Amazon’s all-important AWS segment saw revenue of $35.6 billion versus expectations of $34.9 billion.
The company’s advertising revenue topped $21.3 billion, while online store sales hit $83 billion.
Amazon’s results come after Google (GOOG, GOOGL) reported its earnings on Wednesday, posting better-than-anticipated results and strong cloud growth. But shares slid after the company revealed it will spend upwards of $185 billion on its AI expansion in 2026, a massive increase from the $91.4 billion it spent in 2025.
Last week, Meta (META) and Microsoft (MSFT) said they would both increase their AI spending, drawing opposing reactions from the Street. While traders cheered on Meta, they sold off Microsoft despite both companies saying they are increasing their AI spending, as well.
The report also follows Amazon’s announcement that it is cutting 16,000 jobs as it seeks to “strengthen our organization by reducing layers, increasing ownership, and removing bureaucracy.”
Amazon stock is down 3.6% on the year, while Microsoft is off more than 17%. Google’s (GOOG, GOOGL) shares are up 4.6%.
It’s a familiar strategy across Big Tech, with companies like Microsoft and Meta “flattening” their organizational structure by laying off workers.
Amazon also said it is closing its Amazon Fresh and Amazon Go stores, replacing some with Whole Foods locations.
