SAN FRANCISCO: Amazon shares dove more than 11 per cent on Thursday (Feb 5) as the computing and retail titan reported strong sales but significantly boosted spending estimates.
Amazon reported a profit of US$21.2 billion on net sales of US$213.4 billion in the recently ended quarter as its AWS cloud computing, retail, advertising, and chips businesses thrived.
“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 US$200 billion in capital expenditures across Amazon in 2026,” said Amazon chief executive Andy Jassy.
Market analysts had forecast that Amazon’s capital expenditures would reach about US$147 billion this year, mostly due to AI spending initiatives.
Amazon Web Services (AWS) unit sales in the quarter tallied US$35.6 billion, a 24-per cent jump from the same period a year earlier, according to earnings figures.
Like other tech giants, Amazon is making massive investments to grab a slice of the AI revolution pie.
It is particularly banking on the performance of AWS, the world’s leading cloud computing provider, which is engaged in a race against its fast-growing rivals, Microsoft Azure and Google Cloud.
“We have very high demand; customers really want AWS for core and AI workloads,” Jassy said on an earnings call.
“We’re monetising capacity as fast as we can install it.”
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