Amazon Shares Drop 10% After Earnings Miss and $200 Billion Spending Forecast

Amazon posted earnings per share of $1.95, slightly below analyst expectations of $1.97, while revenue came in ahead of forecasts at $213.39 billion. Despite the revenue beat, investors reacted negatively to the company’s plan to significantly ramp up spending.

The company said capital expenditures are expected to reach approximately $200 billion in 2026, far above analyst estimates of about $147 billion. Amazon’s capital spending totaled roughly $131 billion in 2025.

Chief Executive Andy Jassy said the higher investment reflects strong demand across Amazon’s businesses, particularly in artificial intelligence, cloud infrastructure, robotics, and satellite technology.

AWS drives investment push

Much of the planned spending will be directed toward Amazon Web Services, where demand for both AI and non-AI workloads continues to accelerate. Revenue from AWS rose 24% in the fourth quarter, marking its fastest growth in more than three years.

Jassy said customers are increasingly turning to AWS for core computing and AI workloads, prompting rapid expansion of data centers and supporting infrastructure.

Broader tech spending surge

Amazon’s aggressive forecast comes as major technology firms race to expand AI capacity. Alphabet recently projected capital spending of up to $185 billion in 2026, while Meta Platforms said its investment could rise to as much as $135 billion.

For the current quarter, Amazon expects revenue of $173.5 billion to $178.5 billion, broadly in line with market expectations.

Workforce reductions continue

The earnings report also follows recent workforce reductions. Amazon said it plans to cut about 16,000 corporate roles, following earlier layoffs announced last year. The company employed about 1.57 million people globally at the end of December, most of them in its warehouse operations.

Despite the market reaction, Amazon’s advertising business remained a bright spot, with revenue rising 23% year-on-year to more than $21 billion during the quarter.