Amazon drops over 9% in pre-market trading; $200 billion capital expenditure plan raises market concerns

Amazon stock futures fell over 9% before the market open. On the news front, the company expects capital expenditures (CapEx) in 2026 to reach $200 billion, a massive spending plan that has sparked market concerns.

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Amazon’s $200 Billion Capital Expenditure Guidance Sparks Market Panic

After the close on February 5th, Eastern Time, global e-commerce and cloud computing giant Amazon (NASDAQ: AMZN) released its Q4 2025 earnings report. The fourth quarter net profit increased by 6% year-over-year, but the stock price plunged over 14% in after-hours trading, ultimately closing down more than 11%, with a market value evaporating over $200 billion. The main reason behind this was Amazon’s guidance for 2026 capital expenditures, which triggered market panic.

According to the earnings report, Amazon achieved net sales of $213.39 billion in Q4 2025, up 14% year-over-year, far exceeding analysts’ expectations of $211.49 billion; net profit for the quarter was $21.19 billion, up 6%; earnings per share were $1.95, slightly below market expectations of $1.97, but still demonstrating strong profitability.

As Amazon’s “profit engine,” its cloud business AWS performed particularly well this quarter: revenue grew 24% year-over-year to $35.58 billion, not only surpassing analysts’ forecast of $34.88 billion but also marking the fastest growth rate since the end of 2022. The advertising business also remained steady, with revenue of $21.32 billion, up 22%.

Amazon expects capital expenditures in 2026 to reach $200 billion, a more than 50% increase from $131 billion in 2025, and about 36.9% higher than the consensus Wall Street estimate of $146.6 billion. This figure not only exceeds the median expenditure of approximately $180 billion announced by Google’s parent company Alphabet but is nearly twice that of Meta Platforms (ranging from $115 billion to $135 billion).

Amazon CEO Andy Jassy explained in a statement that the massive investment is directed toward “strong demand for existing products, as well as pioneering opportunities in AI, chips, robotics, and low Earth orbit satellites.” During the earnings call, he further revealed that most of the capital expenditure will be allocated to AWS to meet “unexpectedly high growth in non-AI workloads” and the explosive demand for AI computing power.

This stock price plunge comes at a critical point when Wall Street is collectively reflecting on the AI investment frenzy. Over the past week, tech giants like Google and Microsoft have released their earnings reports, and huge AI spending has become an unavoidable topic. The total capital expenditure of the four major tech giants (Amazon, Microsoft, Alphabet, Meta) in 2026 is expected to exceed $630 billion.

(Source: Cailian Press)