Amazon shares dropped more than 10% in after-hours trading, rattling the U.S. stock market and dragging down technology stocks. This followed the company's announcement of a $200 billion capital expenditure plan for infrastructure and AI in 2026, a figure far exceeding Wall Street expectations and sparking concerns about big tech’s investment returns, previously led by Google's highest projection of $185 billion.
The announcement coincided with Amazon's Q4 2025 earnings report, showing net profit of $21.2 billion across advertising, cloud, retail, and media businesses. Revenue rose 14% to $213.4 billion year-over-year. Retail revenue totaled $141.7 billion, while Amazon Web Services (AWS) cloud sales grew 24% to $35.58 billion, marking the fastest growth in 13 quarters.
Amazon has forecast increased capital expenditure this year to support AI demand and data center expansion. Andy Jassy, Amazon's Chief Executive Officer, affirmed that this significant AI investment is a strategic response to real demand rather than undirected revenue chasing. He described AI as a structural opportunity that could reshape the scale of AWS and Amazon over the long term. AI adoption is accelerating customers’ migration to the cloud. He also revealed that in-house developed chips like Trainium and Graviton are expected to generate over $10 billion in revenue this year.
He emphasized that most investment will be directed to AWS, where not only AI workloads but also general cloud services are growing faster than anticipated. In Q4, AWS revenue increased 24% to $35.58 billion, the fastest pace in over three years. The company also expressed confidence in ongoing demand for data center computing power and plans to increase investment in self-developed AI chips, robotics, and low Earth orbit satellites.
Amazon’s $200 billion figure is the highest among peers and has become the new benchmark for assessing big tech risk. This reflects the broader global technology industry's fierce competition to invest in AI infrastructure. Previously, Google (Alphabet) forecasted 2026 capital expenditure between $175 billion and $185 billion, with Meta and Microsoft also raising AI-related investment budgets.
Despite AWS’s strong growth, Amazon’s profit outlook for the coming period was weaker than market expectations, intensifying concerns over investment returns (ROI) and triggering immediate stock sell-offs following the earnings announcement.
The market remains volatile amid bubble concerns and rising infrastructure costs. Additionally, this week’s worries about memory hardware shortages affecting chipmakers, combined with pressure on software stocks from new AI tools for work and coding, have added ongoing downward pressure.
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Source information Amazon , Financial Times ,CNBC
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