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HomeMarket NewsAmazon shares sink 10% afterhours after earnings miss, $200 billion spending plan
For the ongoing quarter, Amazon expects sales to range between $173.5 billion and $178.5 billion, a growth between 11% to 15% from last year. Analysts were working with a figure of $175.6 billion.
Shares of Amazon.com Inc. fell 10% in extended trading on Thursday after the company reported a mixed quarterly performance and increased its spending plans for 2026 by over 50%.
Amazon's revenue for the fourth quarter of 2025 stood at $213.39 billion, marginally higher than the $211.33 billion projected by analysts. Earnings Per Share (EPS) stood at $1.95, lower than the $1.97 projection.
Revenue from the Amazon Web Service ($35.58 billion) and advertising ($21.32 billion), were largely in-line with expectations. AWS revenue growth of 24% was higher than the 21.4% estimate from analysts and the fastest growth in 13 quarters.
What worried the street further was the management commentary that it plans to spend up to $200 billion this year, as it invests aggressively in to data centers and other infrastructure to meet the rising demand for AI services.
The $200 billion figure is higher than the $131 billion it spent last year and well above the $146.6 billion that analysts were working with.
“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,” CEO Andy Jassy said in a statement.
Jassy went on to add the company has very high demand as customers "really want" AWS for core and AI workloads and that the company is monetizing capacity as fast as it can install it.
Amazon's spending plan is the highest among its peers so far after Alphabet said it plans to spend up to $185 billion, while Meta's spends will range between $115 billion to $135 billion this year.
For the ongoing quarter, Amazon expects sales to range between $173.5 billion and $178.5 billion, a growth between 11% to 15% from last year. Analysts were working with a figure of $175.6 billion.
The results come amidst continued layoffs at the company, with over 16,000 layoffs this week, following around 14,000 being culled last October.
Amazon shares are down 10% in extended trading at $200.45.
