By Tae Kim
Amazon stock was falling sharply after the company reported slightly worse-than-expected earnings results.
Investors may be worrying about the ability to generate profits from the $200 billion guidance for 2026 capex spending, which was way above the $146.6 billion Street estimate.
Amazon shares were down as much as 10% following the report.
For the December quarter, Amazon reported adjusted earnings per share of $1.95, compared to Wall Street's consensus estimate of $1.97, according to FactSet. Revenue came in at $213.4 billion, which was ahead of analysts' expectations of $211.4 billion. Revenue for Amazon's closely watched cloud unit, AWS, was $35.6 billion versus the $34.9 billion analyst estimate.
Amazon said revenue for the current quarter would be between $173.5 billion and $178.5 billion, versus the $175.6 billion average analyst estimate.
"With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital," Amazon CEO Andy Jassy said in a press release.
On Tuesday, UBS analyst Stephen Ju reaffirmed his Buy rating on Amazon stock and raised his price target to $311 from $310.
There are "ongoing prospects for AWS [Amazon Web Services] growth acceleration as the company continues to bring on incremental capacity," he wrote. Amazon is a "coiled spring."
Last month, Amazon said it is cutting 16,000 corporate jobs, citing the need to remove layers and reduce bureaucracy.
Write to Tae Kim at tae.kim@barrons.com
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February 05, 2026 16:21 ET (21:21 GMT)
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