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Amazon's (AMZN) stock came under pressure after the company released its fourth-quarter earnings, sliding more than 11% in pre-market trading. While Amazon’s Q4 results were mixed, they were not disastrous. The real reason for the selloff was Amazon’s announcement that capital expenditures (capex) will rise sharply in 2026.
Management revealed that Amazon expects to invest roughly $200 billion in capex through 2026, with the bulk of that spending directed toward Amazon Web Services (AWS), its cloud computing arm. The announcement raised concerns that have been building across the tech sector as companies race to scale up artificial intelligence (AI) infrastructure. Amazon is now following the same path as peers such as Microsoft (MSFT) and Alphabet (GOOG) (GOOGL), both of which have sharply increased spending to capture AI-driven growth opportunities.