Shares of Amazon.com (AMZN 5.55%) tumbled 12% this past week, according to data from S&P Global Market Intelligence, after the e-commerce titan forecast a staggering $200 billion in capital expenditures for 2026.

Image source: Amazon.

Sales and profits are growing nicely

Amazon’s fourth-quarter results weren’t the problem.

Revenue jumped 14% to $213 billion, while operating income leaped 18% to $25 billion. The gains were driven by broad-based growth across Amazon’s retail, advertising, and cloud businesses.

Amazon

Today’s Change

(-5.55%) $-12.37

Current Price

$210.32

Yet capex is set to grow even faster

Here’s the statement from Amazon CEO Andy Jassy that spooked investors (emphasis added):

With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expect to invest about $200 billion in capital expenditures across Amazon in 2026.

The first part of what Jassy said is just fine. Amazon is enjoying booming demand for its artificial intelligence (AI) services, custom-designed semiconductor chips used by its cloud computing customers, warehouse automation tools, and its forthcoming space-based internet offerings.

However, Wall Street had expected Amazon to spend about $150 billion on its promising expansion initiatives. The extra $50 billion or so was a wee bit more than many investors were comfortable with, so they decided to sell their shares.