New York, Feb 5, 2026, 17:03 EST — After-hours
- Amazon shares dropped roughly 7% in after-hours trading following the company’s warning of a steep increase in capital expenditures for 2026.
- Operating income guidance for the first quarter fell short of analyst expectations, dragged down by increased costs from its Leo internet initiative and more challenging pricing conditions abroad.
- As AI infrastructure costs rise, investors are pushing Big Tech to deliver stronger returns.
Shares of Amazon.com dropped around 7% in after-hours trading Thursday following the company’s forecast of roughly $200 billion in capital expenditures, covering investments in property and equipment like data centers and chips. The profit guidance also fell short of market expectations.
The response highlighted how sharply Wall Street is tuning into the costs tied to AI expansion, despite steady cloud computing demand. Amazon forecasted roughly $200 billion in capex for 2026, up from about $131 billion in 2025. Shares dropped as much as 11% in after-hours trading before clawing back some losses. 1
U.S. stocks tumbled across the board, with tech taking the biggest hit amid concerns that AI investments won’t pay off soon enough. Amazon closed down roughly 4.4%, pushing the Nasdaq to its lowest point since last November, Reuters reported. 2
Amazon ended the day at $222.69 in New York but dipped more after the earnings release. Gil Luria, analyst at D.A. Davidson & Co, pointed out the market’s focus on “bigger increases to capex than to AWS revenue.” 3
Amazon reported fourth-quarter net sales up 14% at $213.4 billion, with AWS revenue jumping 24% to $35.6 billion. CEO Andy Jassy announced plans to invest roughly $200 billion in capital expenditures in 2026, predicting “strong long-term return on invested capital.” 4
Amazon’s earnings came in slightly below Wall Street’s expectations, with profit at $1.95 per share versus the $1.97 analysts had forecast, according to FactSet. Revenue, however, exceeded estimates. AWS revenue also beat predictions, the data showed. 5
The company forecasted first-quarter operating income between $16.5 billion and $21.5 billion, falling short of Street expectations. Amazon cited roughly $1 billion in higher year-on-year Leo costs tied to scaling its operations, along with increased spending on faster delivery and more aggressive pricing in its international markets.
Amazon’s capex strategy places it alongside other tech giants ramping up investments to boost AI computing capacity. The spotlight is chiefly on AWS, which, though smaller than the retail segment in sales, drives most of Amazon’s profits.
The math looks tricky for bulls in the short run. If revenue stalls while spending climbs, margins and cash flow could take a hit. Cloud capacity limits add another layer of complexity — they might cap near-term growth even as they keep investment costs high.
Amazon’s decline hit blue chips hard, making it one of the largest drags on the Dow during Thursday’s trading, MarketWatch reported. 6
A recent regulatory filing revealed that Amazon submitted its quarterly results through a Form 8-K, which included the earnings release and related non-GAAP disclosures. 7
Next, investors will zero in on how Amazon splits the $200 billion capex between AWS and its retail operations. They’ll also want to hear management’s timeline for turning that spending into operating profit during the earnings call Q&A.
