Amazon’s stock declined as much as 10% in post-market trading following its fourth-quarter earnings release. Despite robust sales growth and AWS outperformance, investor focus shifted to Amazon’s increased capital spending plans and a slight earnings-per-share shortfall.
Amazon reported fourth-quarter net sales of $213.39 billion, surpassing market expectations of $211.49 billion and marking a 14% rise from the prior year. Amazon Web Services (AWS) delivered revenues of $35.6 billion—exceeding the $34.8 billion consensus and achieving the highest year-on-year growth in over three years at 24%. Operating income totaled $25.0 billion, above the $24.8 billion forecast.
However, earnings per share for the period came in at $1.95, just below the expected $1.96, weighing on investor sentiment alongside volatility across technology stocks.
Amazon announced a significant capital expenditure plan for fiscal 2026, aiming to spend $200 billion compared to analyst estimates of $147 billion. The company noted that capex in 2025 totaled approximately $131 billion. Management attributed increased investment to meeting demand for artificial intelligence and the expansion of cloud infrastructure, particularly data centers and semiconductor capacity.
The company has recently implemented workforce reductions, with around 16,000 corporate positions eliminated last week and approximately 14,000 layoffs executed last October. Amazon’s headcount stood at 1.57 million globally at year-end.
For the first quarter, Amazon provided guidance indicating projected net sales between $173.5 billion and $178.5 billion, translating to growth of 11% to 15% year-over-year and including about 180 basis points of foreign exchange benefit. Anticipated operating income is forecasted in the range of $16.5 billion to $21.5 billion, compared with $18.4 billion in the same quarter last year.
Despite market concerns over capital expenditures, the outlook from sell-side analysts remains positive, with the majority assigning a buy rating and the consensus target price pointing to notable potential upside from the current share price.
