Amazon joined other major technology firms on Thursday in projecting substantial capital expenditures for 2026, the latest indication that U.S. tech giants do not plan to slow their heavy investments in artificial intelligence in the near term.
The company stated it anticipates capital expenditures across its operations to reach approximately $200 billion in 2026. This figure significantly exceeds the prior market expectation of $144.7 billion, according to data compiled by LSEG.
Following the announcement, Amazon's stock extended its decline in after-hours trading, falling more than 11% at one point. This drop came after the company provided a first-quarter operating profit forecast ranging between $16.5 billion and $21.5 billion, which was below the market's expectation of $22.04 billion.
Large technology companies are allocating massive funds to acquire processors and construct data centers and network equipment to accelerate the development of AI infrastructure. The four largest hyperscale cloud providers—Amazon, Microsoft, Google under Alphabet, and Meta—are projected to have combined capital expenditures surpassing $500 billion this year.
However, recent earnings reports from tech companies have sent a clear signal from Wall Street: rapid growth in AI spending will only be tolerated by investors if it leads to corresponding operational or financial returns.
Google's high capital expenditure guidance of $175 billion to $185 billion for the full year was accepted by investors due to strong growth in its cloud business revenue. Meta's announcement of capital expenditures planned between $115 billion and $135 billion received a similar positive reaction.
In contrast, Microsoft faced investor selling pressure last week after its cloud business growth only slightly exceeded expectations.
As the world's largest cloud service provider, Amazon noted that enterprise demand for AI infrastructure and core digital migration workloads remains robust. However, industry-wide capacity constraints continue to limit its ability to fully meet this demand.
In the fourth quarter, the company increased investments to alleviate these capacity bottlenecks. It also launched an AI infrastructure project named "Rainier," deploying nearly 500,000 of its self-developed Trainium2 chips, primarily for use by Anthropic, the developer of the Claude chatbot.
Although Amazon Web Services accounts for only about 15% to 20% of Amazon's total sales, it contributes over 60% of the company's operating profit.
Amazon continues to bolster its e-commerce business by expanding into rural U.S. areas, enhancing same-day and next-day delivery capabilities, and increasing its presence in the grocery sector to attract more customers.
The company is also implementing significant adjustments in its retail division. Recent initiatives include expanding the Whole Foods store footprint and constructing a large, 225,000-square-foot comprehensive store to compete with retailers such as Walmart and Costco.