Amazon Capex Plan Fuels Stock Volatility

Amazon capex plan prompted volatility after Q4 2025 as AWS growth and $200.0 billion 2026 capex reshaped near-term cash-flow expectations for traders.

February 12, 2026·2 min read
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Flat filled vector of an expanding server stack symbolizing AWS growth and the Amazon capex plan cash-flow impact.

KEY TAKEAWAYS

  • Q4 revenue was $213.4 billion with AWS revenue $35.6 billion and $12.5 billion operating income.
  • Company guided about $200.0 billion in capex for 2026 concentrated in AWS and AI investment.
  • Capex guidance shifted near-term cash-flow expectations and prompted a roughly 16.0% market-value re-pricing.

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Amazon.com Inc. (AMZN) on Feb. 5, 2026 reported Q4 2025 results and unveiled an expansive capital expenditure plan focused on AI and cloud infrastructure. The announcement triggered a multiday market pullback and shifted near-term cash-flow expectations for investors.

Quarter Results and Cash Flow

The company said in a press release that Q4 2025 revenue reached $213.4 billion, up 14% year over year. Net income was $21.2 billion, or $1.95 a share, slightly below the $1.96 consensus estimate.

Amazon Web Services (AWS) posted $35.6 billion in revenue, up 24% year over year excluding foreign exchange effects, with operating income of $12.5 billion. This lifted AWS to a $142 billion annualized run rate, underscoring its continued growth.

Free cash flow for the quarter fell 71% year over year to $11.2 billion, reflecting rising capital expenditures.

For the full year, 2025 revenue rose 12% to $716.9 billion, with net income of $77.7 billion, or $7.17 a share.

Regionally, North America generated $127.1 billion in Q4 revenue, up 10%, with operating income of $11.5 billion. International revenue increased 17% to $50.7 billion, producing $1.0 billion in operating income.

Advertising revenue grew 22% year over year to $21.3 billion. The company reported 1,576,000 full- and part-time employees at the end of the period, about 1% more than a year earlier.

Capex Plan and Market Reaction

Amazon guided roughly $200 billion in capital expenditures for 2026, concentrated in AWS to expand cloud capacity, AI chips, robotics, and satellite projects. Management said the spending aims to deliver strong long-term returns, with Trainium 3 chip supply expected by mid-2026. The chips business has surpassed a $10 billion annualized revenue run rate and is growing at triple-digit percentages year over year.

The capex guidance overshadowed the quarter’s results, prompting a multiday re-pricing that erased about 16% of the company’s market value as investors weighed near-term cash-flow pressure against longer-term opportunity. Some market participants viewed the pullback as a buying opportunity, while others flagged the scale and timing of the spending.

For the first quarter of 2026, Amazon set net sales guidance between $173.5 billion and $178.5 billion, an 11% to 15% increase year over year that includes an estimated 180 basis-point foreign-exchange tailwind. Operating income is projected between $16.5 billion and $21.5 billion, assuming about $1 billion of higher costs related to Amazon Leo.

Investors will monitor whether the company’s heavy investment in infrastructure and chips, supported by the mid-2026 hardware milestone, translates into the stronger cloud economics and returns anticipated in the guidance.

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