Key points:

• Amazon shares dive
• Capex guidance hits hard
• Revenue tops estimates

Cloud computing giant said it plans to spend $200 billion in capex this year. Earnings slipped under consensus but revenue topped estimates.

💸 Capex Shock Hits the Buy Button

• Amazon stock AMZN sank about 12% pre-market Friday after investors fixated on a jaw-dropping $200 billion capital expenditure plan for 2026, far above the Street’s $146.6 billion estimate.
• The worry is not just the actual figure, but the time frame. Markets want to know when those billions will turn into cash flow rather than just more servers, warehouses, and robots.

📊 Earnings Fine, Optics Less So

• Other than that, Amazon posted adjusted earnings of $1.95 per share, a hair below the $1.97 consensus, while revenue beat expectations at $213.4 billion.
• AWS revenue landed at $35.6 billion, ahead of estimates, reinforcing that cloud demand remains strong. But margins matter more when capex headlines steal the show.
• Forward guidance for next quarter roughly matched expectations, which did little to calm nerves already rattled by spending plans.

🚀 AI Ambitions vs Market Reality

• CEO Andy Jassy framed the $200 billion capex as a strategic land grab across AI, custom chips, robotics, and low-earth-orbit satellites, arguing the returns will come over time. Investors heard “eventually” and reached for the sell button.
• Amazon has already trimmed 16,000 corporate roles to reduce bureaucracy, signaling efficiency alongside expansion. The market, however, wants proof that growth and discipline can coexist.

Source: Tradingview