Andy Jassy, CEO of Amazon, speaks throughout an unveiling occasion in New York, Feb. 26, 2025.
Michael Nagle | Bloomberg | Getty Pictures
Amazon‘s inventory plunged 11% in prolonged buying and selling on Thursday, dragged decrease by market jitters across the firm’s $200 billion capex plans, the best spending forecast among the many megacap corporations.
The forecast is a pointy improve from Amazon’s capital expenditures final 12 months, and it was greater than $50 billion above analysts’ expectations. The corporate reported spending roughly $131 billion on purchases of property and gear in 2025, up from about $83 billion within the 12 months prior.
Tech corporations have laid out aggressive spending plans on synthetic intelligence infrastructure since OpenAI ushered within the fashionable period of this expertise with the discharge of ChatGPT in late 2022, however in the beginning of 2026, these lavish commitments have solely stored rising.
Google guardian Alphabet on Wednesday mentioned it could spend as much as $185 billion in 2026, whereas Meta final week mentioned its capital expenditures might practically double from final 12 months to someplace between $115 billion to $135 billion in 2026
On a convention name with buyers, Wall Road analysts pressed Amazon executives for extra readability across the spending blitz and when it might start to repay. CEO Andy Jassy mentioned in ready remarks firstly of the decision that he was “assured” that firm’s cloud unit will see a “sturdy return on invested capital,” although he did not say when it might materialize.
“Assist us, get to that — get to your stage of confidence in having a robust long run return on that invested capital,” Mark Mahaney, Evercore ISI head of web analysis, mentioned to Jassy.
Jassy mentioned the corporate wants the capital to maintain tempo with “very excessive demand” for Amazon’s AI compute, which requires extra infrastructure similar to information facilities, chips and networking gear.
“This is not some kind of quixotic, top-line seize,” Jassy mentioned. “Now we have confidence that we, that these investments will yield sturdy returns on invested capital. We have achieved that with our core AWS enterprise. I believe that can very a lot be true right here as properly.”
Gross sales at Amazon Net Companies grew 24% to $35.6 billion in the newest interval, beating analysts’ expectations and marking the cloud unit’s “quickest progress in 13 quarters,” Jassy mentioned.
AWS might’ve grown quicker if it had extra capability to fulfill demand, “so we’re being extremely scrappy round that,” he mentioned.
The corporate’s cloud unit added virtually 4 gigawatts of computing capability in 2025, and AWS expects to double that energy by the tip of 2027, Jassy famous.
Barclays analyst Ross Sandler requested Jassy how he sees the AI market evolving from the present panorama, the place it stays “a bit top-heavy with numerous the spend clustering round a number of of the AI-native labs.”
Jassy mentioned the AI market has change into extra like a “barbell,” with the AI labs on one facet and enterprises on the opposite finish, seeking to the expertise as a “productiveness and value avoidance” instrument. The center is comprised of enterprises which might be in numerous phases of constructing AI purposes, he mentioned.
“That center a part of the barbell very properly could find yourself being the most important and most sturdy,” Jassy mentioned.
WATCH: Amazon shares fall on earnings miss, $200 billion steering for 2026 capex spending
