NEW YORK: Amazon shares fell about 8% in U.S. trading on Friday, Feb. 6, 2026, after the company forecast roughly $200 billion in capital spending for 2026 and reported fourth-quarter earnings that came in slightly below analyst expectations. The stock drop made Amazon one of the weakest performers in the Dow Jones Industrial Average session.
Amazon said it expects to invest about $200 billion in capital expenditures across the company in 2026. The forecast follows a sharp rise in spending on property and equipment, with purchases of property and equipment totaling $131.8 billion for full-year 2025, according to the company’s cash flow statement. Amazon linked the 2026 investment plan to areas including artificial intelligence, chips, robotics and low earth orbit satellites.
For the quarter ended Dec. 31, 2025, Amazon reported net sales of $213.4 billion, up 14% from $187.8 billion a year earlier. Net income rose to $21.2 billion, or $1.95 per diluted share, compared with $20.0 billion, or $1.86 per diluted share, in the year-ago quarter. Operating income increased to $25.0 billion from $21.2 billion.
Amazon Web Services, its cloud computing unit, posted fourth-quarter sales of $35.6 billion, up 24% year over year. North America segment sales rose 10% to $127.1 billion, while International segment sales increased 17% to $50.7 billion. Segment operating income was $12.5 billion at AWS, $11.5 billion in North America and $1.0 billion internationally.
Capital spending forecast
Amazon said fourth-quarter operating income included special charges totaling $2.4 billion. The company cited $1.1 billion tied to the resolution of tax disputes associated with its stores business in Italy and a lawsuit settlement, $730 million in estimated severance costs, and $610 million in asset impairments primarily related to physical stores. Excluding those charges, Amazon said fourth-quarter operating income would have been $27.4 billion.
In a supplemental breakdown of net sales, Amazon reported online stores revenue of $83.0 billion in the quarter, up 10% from a year earlier. Third-party seller services revenue rose 11% to $52.8 billion. Advertising services revenue increased 23% to $21.3 billion, and subscription services revenue rose 14% to $13.1 billion. Physical stores revenue increased 5% to $5.9 billion.
For full-year 2025, Amazon reported net sales of $716.9 billion, up 12% from $638.0 billion in 2024. Operating income rose to $80.0 billion from $68.6 billion, and net income increased to $77.7 billion, or $7.17 per diluted share, from $59.2 billion, or $5.53 per diluted share. AWS segment sales for the year were $128.7 billion, up 20%.
Outlook and near-term guidance
For the first quarter of 2026, Amazon forecast net sales between $173.5 billion and $178.5 billion, implying growth of 11% to 15% from the first quarter of 2025. The company forecast operating income between $16.5 billion and $21.5 billion, compared with $18.4 billion in the first quarter of 2025. Amazon said the outlook includes about $1 billion of higher year over year Amazon Leo costs as it scales in 2026.
Amazon reported trailing 12-month operating cash flow of $139.5 billion, up from $115.9 billion in the prior-year period. Trailing 12-month free cash flow decreased to $11.2 billion from $38.2 billion, which the company attributed primarily to a $50.7 billion year over year increase in purchases of property and equipment, reflecting investment in artificial intelligence. The spending outlook and earnings results drove a sharp market reaction following the report. – By Content Syndication Services.