Consumer Discretionary

Amazon is planning to allocate more than $100 billion in capital expenditure this year as part of a push to build generative AI services. UBS analysts in a research note say the capex plans are a sign of higher demand, particularly as demand for on-premise to cloud infrastructure continues as IT budgets return to form. They estimate that about 70% will be allocated to Amazon Web Services. “Even as Amazon and the broader industry continues to face a shortage in chips/components, we believe the main takeaway here is that demand for AWS continues to outpace supply,” they say. Shares tick down 2.7% premarket after 1Q sales and operating income projections came up short of Wall Street’s expectations.

Amazon.com shares fall premarket after fourth-quarter cloud-computing sales and the tech giant’s outlook for the first quarter came below analysts’ expectations. Amazon stock closed 1.1% higher at $238.83 ahead of results Thursday. Shares fell post market and are down 3.8% premarket, touching a low of $229.24. Sales at Amazon Web Services, the group’s cloud-computing unit, grew 19% to $28.79 billion, but missed a FactSet forecast of $28.82 billion. Meanwhile, Amazon guided for sales of between $151 billion and $155.5 billion in the first quarter, with operating profit between $14 billion and $18 billion. Analysts are forecasting net sales of $158.70 billion and operating profit of nearly $18.55 billion for the current quarter, according to FactSet.

Amazon.com’s big spending plans on artificial intelligence are worrying investors after DeepSeek showed that developing the technology doesn’t necessarily require billions of dollars, AJ Bell’s Dan Coatsworth writes in a research note. Amazon plans more than $100 billion in capital expenditure this year compared to about $78 billion spent last year as the tech giant ramps up investments on data centers, chips and networking gear for AI. “That’s a huge outlay to stomach now and then a waiting game before it gets a positive financial return on the investment,” Coatsworth says. Amazon shares are down 3% premarket at $231.75.

There’s stepping on the gas, and then there’s flooring it. When it comes to investing in artificial intelligence, Amazon.com just did the latter. While reporting its fourth-quarter results Thursday afternoon, Amazon became the latest tech giant to project a major jump in capital spending for this year — even after a big surge last year. Amazon didn’t give a precise forecast but said the $26.3 billion of capital spending in the latest quarter was a run rate that will be “reasonably representative” of what the company will spend this year. That would equate to about $105 billion for the year, up 35% from last year’s total and far above the $86 billion analysts were expecting, according to consensus estimates from Visible Alpha. And because Amazon defines its capital spending as cash expenditures and equipment acquired under finance leases, net of proceeds from the sale of property and equipment, the actual

Amazon stock fell ahead of the open Friday after the tech giant’s fourth-quarter results on Thursday afternoon presented a mixed picture of the business. Earnings per share beat expectations, coming in at $1.86, compared to Wall Street’s consensus estimate of $1.49, according to FactSet. Revenue for the quarter reached $187.8 billion, against expectations of $187.3 billion, and up 10% on the year. But the company’s important cloud unit, AWS, provided the big disappointment for investors. AWS saw growth of 19% to $28.8 billion, missing expectations of $28.9 billion. The unit is closely watched because it’s a profit machine for Amazon. In the latest quarter, AWS had a 36.9% operating profit margin, versus 6.6% for the rest of Amazon. Though AWS represented only 15% of Amazon revenue, it accounted for over half the operating profit. The stock was down 2.6% to $232.60 in premarket trading Friday. Amazon’s advertising business is the

Amazon.com continues to innovate and raise the bar even as 4Q cloud-computing sales and the tech company’s outlook for 1Q came below analysts’ expectations, AJ Bell’s Dan Coatsworth writes in a research note. “Fundamentally, Amazon remains in great shape,” he says. The group can afford to try new things and even fail with some experiments because it generates significant cash flow, Coatsworth notes. This strength should be recognized by investors, he adds. Amazon shares are down 2.7% premarket at $232.33.