Amazon Shares Plunge After Bold $200 Billion Spending Plan

Amazon’s fourth-quarter earnings report, released after the closing bell on February 5, 2026, sent shockwaves through the financial world. The e-commerce titan, long seen as a bellwether for the broader tech sector, posted results that were a mixed bag: strong top-line growth, especially in its lucrative cloud and international segments, but an earnings miss and, more crucially, a spending outlook that rattled even its most ardent supporters.

Let’s get into the numbers. Amazon reported total sales of $213.39 billion for the quarter, a 13.6% year-over-year jump that easily cleared Wall Street’s consensus estimate of $211.44 billion, according to Seeking Alpha. North American revenue climbed 10% to $127.1 billion, while international sales surged 17% to $50.7 billion. The company’s Amazon Web Services (AWS) division, a critical profit engine, grew 24% to $35.6 billion—its fastest pace in over three years, as CEO Andy Jassy noted in the company’s press release.

But despite these impressive gains, Amazon’s earnings per share clocked in at $1.95, falling just shy of analysts’ expectations of $1.97. While a two-cent miss might seem trivial, it was enough to unsettle investors already on edge about the company’s aggressive spending plans. Shares tumbled more than 10% in after-hours trading, marking what could become Amazon’s worst post-earnings reaction since April 2022, when the stock plunged 14% after a disappointing report, as reported by MarketWatch. If the drop holds through Friday’s regular session close, it would cement this quarter as a historic setback for the retail and tech behemoth.

So what’s behind the market’s sour mood? The answer lies in Amazon’s guidance and capital expenditure plans for the year ahead. Management projected first-quarter 2026 revenue in the range of $173.5 billion to $178.5 billion, bracketing analysts’ forecast of $175.2 billion. More worrisome to some was the company’s forecast for operating income: between $16.5 billion and $21.5 billion, below the consensus estimate of $22.15 billion. And then came the bombshell—Amazon expects to spend a staggering $200 billion on capital expenditures in 2026, up sharply from the roughly $130 billion it spent in 2025. Analysts had been bracing for a figure closer to $150 billion, according to Bloomberg.

This jaw-dropping spending plan covers data centers, chips, and other infrastructure—much of it aimed at expanding AWS’s capacity and pushing deeper into artificial intelligence. While AWS is Amazon’s highest-margin segment and has become essential to the company’s profitability, the sheer scale of the investment has left some investors wondering whether the returns will justify the outlay. As Bloomberg noted, “Amazon.com Inc. shares dropped after the company announced plans to spend $200 billion this year on data centers, chips and other equipment, worrying investors that its colossal bet on artificial intelligence may not pay off in the long run.”

CEO Andy Jassy, for his part, defended the strategy. “AWS is growing at its fastest pace in over three years, advertising revenue is up 22%, and our in-house chips business is posting triple-digit year-over-year growth,” he said in the earnings release. Jassy’s message was clear: Amazon is betting big on the future, especially as demand for AI-powered services and infrastructure continues to skyrocket. The company’s retail business, he added, is seeing strong growth both in North America and internationally.

On paper, those growth numbers are hard to argue with. AWS’s 24% year-over-year sales increase to $35.6 billion underscores its status as a juggernaut in the cloud computing world, and advertising’s 22% growth shows Amazon’s ability to monetize its vast ecosystem. The in-house chip division’s triple-digit growth is particularly noteworthy, as custom silicon is seen as a key competitive advantage in the AI arms race.

Yet, for many investors, the question isn’t whether Amazon can grow, but at what cost—and whether the rewards will come fast enough to justify the risks. The company’s $200 billion capex guidance is nearly unprecedented, even among tech giants. For context, Amazon spent about $130 billion on property and equipment last year, and the step up to $200 billion represents a 54% increase in just one year. That’s a massive leap, and it’s no surprise that it’s given some on Wall Street pause.

Despite these concerns, analysts remain broadly bullish on Amazon’s long-term prospects. According to TipRanks, 36 analysts have issued a “Strong Buy” rating on the stock in the past three months, with just one “Hold.” The average price target sits at $298.53, implying a 34% upside from current levels. Of course, as TipRanks cautioned, “estimates will likely change following today’s earnings report.”

Still, the disconnect between Amazon’s ambitious vision and the market’s near-term jitters is palpable. Some investors worry that the company’s massive spending spree could crimp profits and cash flow, especially if economic headwinds or competitive pressures intensify. Others, however, see Amazon’s willingness to invest as a sign of strength and confidence in its ability to lead the next wave of technological innovation.

It’s worth noting that Amazon’s spending isn’t happening in a vacuum. Rivals like Microsoft and Google are also pouring billions into AI and cloud infrastructure, racing to capture a bigger share of the market as businesses and consumers alike demand more powerful, flexible, and secure digital services. In this context, Amazon’s capex surge could be seen as a necessary move to maintain its leadership position—albeit one that comes with significant risks.

Looking ahead, investors will be watching closely to see whether Amazon can translate its massive investments into sustained growth and profitability. The company’s guidance for the first quarter of 2026 suggests a cautious approach, with revenue and operating income projections that acknowledge both the opportunities and the challenges ahead. As always, the proof will be in the execution—and in the company’s ability to balance bold bets with disciplined financial management.

For now, Amazon’s latest earnings report is a reminder that even the biggest and most successful tech companies aren’t immune to market scrutiny. With the stakes higher than ever, all eyes will be on Seattle as Amazon navigates this pivotal moment in its history.