Amazon just dropped its Q4 2025 earnings bomb, and Wall Street reacted like someone announced the company plans to buy every data center on Earth with a company credit card.
Shares tumbled roughly 8-10% in after-hours trading as investors digested a mixed bag: solid revenue beats overshadowed by a profit miss and a jaw-dropping $200 billion capital expenditure plan for 2026—far exceeding what analysts had penciled in around $146 billion.
The impact hit like a surprise delivery fee on Prime Day. Investors, already twitchy from the AI arms race that’s turning balance sheets into construction budgets, saw Amazon’s massive spending pledge and promptly reached for the antacids.
While Microsoft and Google have been pouring billions into AI infrastructure, Amazon decided to outspend them all, promising to nearly double down from 2025’s roughly $131 billion. The result? A classic case of “good numbers, bad vibes,” with free cash flow concerns and margin jitters sending the stock into a temporary nosedive.
Amazon delivered $213.4 billion in revenue for the quarter, up 14% year-over-year and comfortably topping Wall Street’s $211-ish billion guess. Not bad for a company that once sold books from a garage.
AWS roared back with 24% growth to $35.6 billion, its fastest clip in recent memory. Customers apparently can’t build AI models fast enough, and Amazon’s capacity is getting snapped up quicker than free samples at a warehouse sale.
On the profit side, things got stingy. EPS came in at $1.95, a hair below the $1.96-$1.97 consensus. Close enough to feel the burn, yet far enough to spark selling.
Then came the real headline-grabber: capex guidance for 2026 at about $200 billion, mostly funneled into AWS to chase AI, chips, robotics, and even low Earth orbit satellites. CEO Andy Jassy called it a “seminal opportunity,” sounding like a man who just spotted the next gold rush while everyone else is still panning in the stream.
Management insists the demand is so hot that new capacity monetizes almost immediately, with the backlog growing 40% faster than revenue. Translation: We’re spending like drunken sailors because customers are lining up with wheelbarrows of cash.
Analysts aren’t panicking entirely. Bank of America’s Justin Post, a top-ranked voice, called the investment logical given AWS’s market lead. He kept Buy rating, though he nudged his price target down slightly to $275—still implying solid upside.
Wall Street’s consensus remains bullish, with a Strong Buy rating and an average target around $283, suggesting about 35% potential gains over the next year. Apparently, betting against Amazon’s AI bet is still considered bad form.
In the end, Amazon is playing the long game in a sector where standing still means getting lapped by rivals. Investors may have blinked at the price tag today, but history shows the company rarely bets small—and rarely loses when it bets big.
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