Shares of Amazon.com (AMZN 1.52%) sank on Friday after the cloud computing colossus announced a gargantuan capital spending plan.
By the close of trading, Amazon's stock price was down more than 5%.
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Broad-based growth drove Amazon's profits higher
Amazon's fourth-quarter net sales climbed 14% to $213.4 billion.
The online retail leader's high-margin advertising sales jumped 23% to $21.3 billion.
Even more importantly, Amazon Web Services (AWS) generated $35.6 billion in sales, with revenue growth accelerating to 24%.
Amazon's cloud computing division is now a massive and highly lucrative business, with full-year sales and operating income of $128.7 billion and $45.6 billion, respectively, in 2025.
NASDAQ: AMZN
Key Data Points
"This growth is happening because we're continuing to innovate at a rapid rate and identify and knock down customer problems," CEO Andy Jassy said in a press release.
All told, Amazon's closely watched operating income increased 18% to $25 billion in the fourth quarter.
A massive CAPEX plan has investors on edge
Looking ahead to the first quarter of 2026, Amazon guided for net sales to grow 11% to 15%, to $173.5 billion to $178.5 billion, with operating income of $16.5 billion to $21.5 billion.
But what really caught investors' attention -- and likely drove the sell-off in Amazon's shares -- was Amazon's forecast for a staggering $200 billion in capital expenditures for 2026. That figure dwarfs Amazon's operating cash flow of $139.5 billion over the trailing twelve months.
Jassy said he expects Amazon to generate "strong long-term returns on invested capital," driven in part by surging demand for the company's artificial intelligence (AI) offerings.
Yet judging by its stock price performance on Friday, investors are understandably concerned about Amazon's aggressive spending spree.
