Amazon has signalled that it will push ahead with one of the largest investment programmes in corporate history, forecasting capital expenditure of about $200 billion in 2026, largely driven by artificial intelligence, cloud computing and advanced infrastructure. The announcement places the world’s biggest online retailer firmly alongside its Big Tech rivals in refusing to slow spending, even as markets grow increasingly sensitive to the returns from AI outlays.
The projection represents a dramatic increase from an estimated $144.67 billion in capital expenditure, according to data compiled by LSEG, underscoring the scale of Amazon’s ambitions. Founded in 1994 by Jeff Bezos, who remains executive chairman and its largest individual shareholder, the company has evolved into a sprawling technology and logistics empire, with AI now at the centre of its long-term strategy.
Investors, however, reacted nervously. In after-hours trading on Wall Street on Thursday, Amazon shares fell $16.76, or 7.2 per cent, to $205.90, cutting the company’s market value to about $2.4 trillion. The sell-off followed Amazon’s forecast that operating income for the first quarter would range between $16.5 billion and $21.5 billion, below analysts’ expectations of $22.04 billion.
Andy Jassy, Amazon’s chief executive, sought to reassure markets that the spending surge would ultimately pay off. He said the company was seeing strong demand across its businesses and major opportunities in areas such as artificial intelligence, custom chips, robotics and low earth orbit satellites. Jassy added that Amazon anticipated a strong long-term return on invested capital from the planned investments.
Across the technology sector, the scale of spending has reached unprecedented levels. Amazon, Microsoft, Google and Meta Platforms, the four dominant hyperscalers, are expected to collectively spend more than $500 billion this year on processors, data centres and networking equipment as they race to build AI infrastructure capable of supporting next-generation models and services.
Yet investors have become more selective, rewarding companies that demonstrate clear financial or operational gains from their spending while punishing those that do not. Google’s forecast capital expenditure of $175 billion to $185 billion was broadly accepted after the company reported robust cloud revenue growth, as was Meta’s plan to invest between $115 billion and $135 billion. Microsoft, by contrast, saw its shares fall after growth in its cloud unit only narrowly exceeded expectations.
For Amazon, which operates the world’s largest cloud services platform through Amazon Web Services, demand has remained strong for both AI-related infrastructure and more traditional digital migration workloads. However, industry-wide capacity constraints have limited its ability to fully meet that demand, prompting heavy investment in recent quarters.
In the fourth quarter, Amazon ramped up spending to ease these bottlenecks and launched its AI infrastructure initiative known as Rainier. As part of the project, the company brought nearly half a million of its in-house Trainium2 chips online, with a significant portion dedicated to Anthropic, the developer behind the Claude chatbot.
Although AWS accounts for only around 15 to 20 per cent of Amazon’s overall revenue, it generates more than 60 per cent of the group’s operating profit, making it central to the company’s financial performance and its AI ambitions.
Beyond cloud computing, Amazon continues to pour money into its retail operations. The company is expanding into rural areas of the United States, enhancing same-day and next-day delivery, and pushing further into perishable groceries in an effort to attract and retain customers.
It is also reshaping its physical retail presence. Recent moves include plans to expand its Whole Foods footprint and the development of a 225,000-square-foot megastore concept designed to compete more directly with established giants such as Walmart and Costco. Together, these initiatives underline Amazon’s willingness to spend aggressively across its businesses, even as markets question how quickly the returns will arrive.
