Amazon outdid its Big Tech competitors by setting a bold target to invest $200 billion in capital expenditures across the company in 2026, as the e-commerce giant plans on aggressively bolstering artificial intelligence (AI) spending, namely to power cloud computing platform Amazon Web Services (AWS).
The announcement stunned Wall Street, with company stock selling off almost 10 percent in early trading Friday. The volatile price movement capped off a weeklong fire sale across tech companies as investors remain concerned about the projected returns of the spending, alongside worries that AI platforms could threaten existing enterprise software businesses.
Amazon’s 2026 CapEx spending is projected to surpasses that of both Google parent Alphabet, which plans on expenses as high as $185 billion, and Meta, which could reach $135 billion.
Andy Jassy’s tenure as Amazon’s CEO has been defined by the company’s ability to cut costs across the business, all while hastening delivery speeds and optimizing inventory placement across the supply chain. But like its Big Tech brethren, Amazon has spent the past year keeping its money printer humming when it comes to AI-related spending, having spent $131.8 billion on capital expenditures in 2025.
During Thursday’s earnings call, the company brass also touched on some wins in its delivery business, noting that it shipped nearly 70 percent more items same-day in 2025 in the U.S. than it did the year prior. As part of a $4 billion spending initiative, nearly twice as many monthly customers in rural areas are receiving same-day delivery year-over-year, according to Jassy.
“On Christmas Eve, customers in about 4,000 U.S. cities could order items up until midday and get them that same day,” Jassy touted.
Just six months after launching the Add to Delivery button for Prime users within the mobile app and website, the feature makes up about 10 percent of all Prime volume fulfilled through the Amazon network each week. With the feature, Prime members can add items to already scheduled deliveries without going through checkout again or paying additional shipping fees.
On paper, Amazon’s financial results continue to impress despite the poor reception from the analyst community.
Net sales increased 14 percent to $213.4 billion in the fourth quarter, and was up 12 percent when excluding a $2.8 billion favorable impact from year-over-year changes in foreign exchange rates.
Amazon reeled in $21.2 billion in net income for the holiday quarter, or $1.95 per diluted share, a 6 percent jump from the year-ago period.
Sales at the profit-generating AWS segment soared 24 percent year over year to $35.6 billion. Growth in the cloud computing unit was the largest since the 28 percent increase seen in the third quarter of 2022.
Its two largest businesses—online stores and third-party seller services—are still seeing double-digit sales growth at 10 percent and 11 percent, respectively. Online store sales jumped to $83 billion, while the seller services increased to $52.8 billion.
During the call, Jassy revealed that Amazon had extended the number of individual regions in the U.S. that comprise its fulfillment network from eight to 10.
That regionalization strategy was implemented in 2023, and was designed to make each region in its supply chain network more self-sufficient. Amazon sought to have as many orders as possible fulfilled by stock within any given region, to ultimately cut the distance a package needs to travel and reduce costs.
“We’ve extended regionalization to what we do with our inbound delivery to be much more efficient, being able to get more items closer to customers more quickly,” Jassy said. “We’re doing a lot of work, and we’ve made a huge amount of progress in being able to get more units into each box. And as we’re able to get more units into each box, it obviously saves shipments, and we drive better operating income when we do that.”
Although the regionalization had led to a deceleration in the growth of shipping costs throughout 2024 as the Everything Store aggressively embarked on its cost-cutting crusade, these expenses kicked back up into high gear throughout the 2025 fiscal year.
In the fourth quarter, total worldwide shipping costs increased 10 percent to $31.5 billion, marking a new record for the metric and three straight quarters of expanding growth.
These costs include inbound and outbound shipping expenses, such as costs related to transportation, sortation and delivery centers, as well as the costs to receive products from suppliers.
Fulfillment costs, which consist of spending related to operating and staffing fulfillment centers, stores and customer service centers, increased 10 percent to $30.8 billion.
Despite the reacceleration in expenses, Jassy said Amazon sees further opportunity to enhance productivity in its global fulfillment network while delivering at faster speeds.
“We will continue optimizing inventory placement to drive down distance traveled, reduce touches per package and improve package consolidation,” Jassy said.
Jassy also pointed to continuing investments in robotics to increase efficiency and elevate the customer experience.
“We have over 1 million robots today in our fulfillment network,” Jassy said. “They take care of all sorts of functions, but still a fraction of what I think we’re going to be able to enable over time.”
The New York Times reported in October that a leaked internal document from Amazon indicated that the e-commerce giant’s robotics deployments could help the company avoid hiring 160,000 people that it would have needed to onboard by 2027.
The earnings report came a week after the online marketplace announced it was laying off 16,000 employees across the company. These roles are included in the 30,000 layoffs initially reported by Reuters in October, with 14,000 positions officially put on the chopping block at the time.
A notice shared to employees by Amazon’s senior vice president of people experience and technology Beth Galetti sought to assure that it wasn’t in company plans to announce broad staff reductions every few months.
“Every team will continue to evaluate the ownership, speed and capacity to invent for customers, and make adjustments as appropriate,” Galetti said.
