Amazon shares slump as hefty capex outlook offsets Q4 revenue beat

(Sharecast News) - Online retail giant Amazon posted another quarter of solid revenue growth late on Thursday, driven by a strong showing from AWS, but shares fell in extended trading after it unveiled plans for a major increase in capital spending in 2026.

AWS revenue climbed almost 24% in the fourth quarter to $35.58bn, ahead of market expectations, and accounted for about 17% of total sales, while total revenues came in at $213.39bn, up from $187.79bn last year and marginally ahead of consensus, marking the fourth straight quarter in which Amazon has topped revenue expectations.

Operating income from its AWS unit rose to $12.47bn, also beating forecasts, with its operating margin nudging up to 35% from 34.6% in the prior quarter. At group level, Amazon reported adjusted earnings of $1.95 per share, slightly below the $1.98 expected after three consecutive beats.

However, shares traded lower prior to the open after chief executive Andy Jassy said Amazon expects to invest around $200bn in 2026, largely directed toward AWS, a figure well above consensus estimates of $148.86bn.

"Some of it is for our core workloads, which are non-AI workloads, because they're growing at a faster rate than we anticipated," Jassy said. "But most of it is in AI, and we just have a lot of growth, a lot of demand."

As of 0910 GMT, Amazon shares were down 10.48% in pre-market action at $200.84 each.

Reporting by Iain Gilbert at Sharecast.com