"But shares fell 11% in after hours trading on Thursday as investors appeared to be spooked by the Seattle-based tech company's plans to increase capital spending by nearly 60% to $200 billion from last year's $128 billion as it sees opportunities in artificial intelligence, robots, semiconductors and satellites. The company's fourth-quarter profits also were slightly below analysts' projections. Wall Street analysts were expecting capital spending to rise to around $147 billion this year, according to FactSet."
"Amazon's CEO Andy Jassy told investors on the call following the earnings release that it anticipates strong long-term return on the invested capital. "We are continuing to see as fast as we install this capacity, this AI capacity, we are monetizing it," Jassy said. "So it's just a very unusual opportunity. I passionately believe that every customer experience that we know of today is going to be reinvented.""
Amazon's fourth-quarter sales rose 14% driven by strong holiday spending and growth in its cloud computing unit. Shares dropped 11% after hours after the company announced plans to raise capital spending almost 60% to $200 billion to pursue artificial intelligence, robotics, semiconductors and satellites. Fourth-quarter profits were slightly below analysts' projections, while Wall Street had expected capex near $147 billion. CEO Andy Jassy said the company expects strong long-term returns and that new AI capacity is being monetized as installed. Amazon announced roughly 16,000 corporate layoffs and about 5,000 retail cuts tied to store closures, exceeding 30,000 total job reductions since October. The company said AI was not the primary reason for most cuts and that many reductions aimed to remove layers and increase speed.
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