"worrying investors that its colossal bet on artificial intelligence may not pay off in the long run. The company reported spending roughly $130 billion on property and equipment in 2025. Analysts anticipated those expenses would reach about $150 billion this year. Chief Executive Officer Andy Jassy said the money predominantly would go toward the company's Amazon Web Services cloud unit, and most of that spending would be for AI workloads."
"The spending will weigh on profits, with Amazon giving a forecast for operating income in the current quarter of $16.5 billion to $21.5 billion. Analysts, on average, estimated $22.2 billion. The shares fell by as much as 10% as the markets opened in New York on Friday, for the biggest intraday drop since August 2024. Amazon's stock has declined about 13% so far this year."
Amazon plans to spend $200 billion this year on data centers, chips and other equipment. The company spent roughly $130 billion on property and equipment in 2025, compared with analysts' expectation of about $150 billion this year. Most of the capital will go to Amazon Web Services to support AI workloads. Amazon forecast operating income for the current quarter of $16.5 billion to $21.5 billion, below analysts' average estimate of $22.2 billion. Shares fell as much as 10% intraday and are down about 13% year-to-date. AWS revenue rose 24% to $35.6 billion, with $12.5 billion operating income, while analysts express concern that capex is growing faster than returns and major cloud providers may be overbuilding for AI.
Read at www.mercurynews.com
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