Amazon Shares Slip as $200 Bn Capex Plan Overshadows Strong AWS growth

Underscoring mounting investor unease over escalating artificial intelligence plans, Amazon shares slid sharply after the technology giant unveiled plans for a dramatic increase in AI-related spending, alongside fourth-quarter cloud growth that lagged key rivals.

While Amazon Web Services delivered solid expansion, the scale of the company’s investment plans weighed heavily on the stock. Amazon reported earnings per share of $1.95 on revenue of $213.39 billion, but markets focused squarely on what comes next. Shares fell by about 11% in after-hours trading.

Amazon, in its Q4 earnings, said it expects capital expenditure to reach $200 billion in 2026, over 56% higher than the previous year. Capital spending stood at roughly $131 billion in 2025 and is set to continue climbing this year as the company aggressively builds data centres and other infrastructure to meet surging AI demand.

“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,” President and CEO Andy Jassy said in a statement.

AWS revenue rose 24% year-on-year to $35 billion in the fourth quarter, beating analysts’ expectations of 21.4% growth. Jassy described this as the cloud unit’s “fastest growth in 13 quarters”.

Speaking on a conference call with investors, Jassy said the bulk of spending would “predominantly” go to AWS, adding that non-AI workloads were growing faster than anticipated. Last October, Amazon opened its $11-billion AI data centre, Project Rainier, built exclusively to handle workloads from Anthropic.

“We have very high demand,” Jassy said. “Customers really want AWS for core and AI workloads, and we’re monetising capacity as fast as we can install it.”

Amazon remains the global leader in cloud infrastructure, with an estimated 30–31% market share it effectively created nearly two decades ago. However, Google and Microsoft are expanding rapidly, and many analysts believe they are currently seeing stronger momentum from AI-driven services.

This earnings season, however, markets are applying a different lens. Investors are no longer judging Big Tech simply on headline growth, but on whether companies can convincingly justify the scale of their spending. The largest technology firms are expected to invest more than $500 billion in AI infrastructure in 2026, according to Goldman Sachs, prompting investors to favour those pairing heavy outlays with clearer near-term returns.

Alphabet, Google’s parent, said this week it expects capital spending of between $175 billion and $185 billion in 2026, while Meta warned its expenditure could nearly double to between $115 billion and $135 billion.