Amazon.com Inc. delivered record quarterly revenue on the back of strong cloud growth during the fourth quarter, but its stock fell in late trading after it missed expectations on profit and raised its fiscal 2026 capital expenditure forecast to $200 billion.

The online retail and cloud computing giant reported earnings before certain costs such as stock compensation of $1.95 per share, trailing Wall Street’s consensus estimate of $1.97. Meanwhile, revenue for the period rose 14%, to $213.39 billion, ahead of the $211.33 billion forecast. Operating income came to $25 billion at the end of the quarter, up from $21.2 billion in the year-ago period, while net income ended at $21.2 billion, up from $20 billion.

Investors were also keen to hear about Amazon’s spending plans for the next fiscal year at a time when it and many of its rivals are investing aggressively in data centers and other infrastructure needed to meet the surge in demand for artificial intelligence. Even as some analysts have raised concerns about the lavish spending of Amazon and cloud peers such as Microsoft Corp. and Google LLC, the complaints haven’t deterred anyone. Earlier this week, Google’s parent company Alphabet Inc. said it’s expecting to spend between $175 billion and $185 billion on capital expenditures, while Meta Platforms Inc. guided between $115 billion and $135 billion.

Amazon is upping the stakes even more. It said today it’s projecting its fiscal 2026 capital expenditures to hit $200 billion this year, well ahead of Wall Street’s forecast of $146.6 billion, and far in excess of the $131 billion spent in 2025. Investors were alarmed, and the company’s stock sank more than 10% in extended trading following the announcement.

In a statement, Amazon Chief Executive Andy Jassy (pictured) justified the decision, citing “strong demand for our existing offerings and seminal opportunities in AI, chips, robotics and low Earth orbit satellites.” On a conference call with analysts, Jassy elaborated further, saying that the bulk of capex in 2026 would go to Amazon Web Services Inc., the company’s cloud computing unit, where he said “non-AI workloads are growing at a faster rate than we anticipated.”

“We have very high demand,” Jassy added. “Customers really want AWS for core and AI workloads, and we’re monetizing capacity as fast as we can install it.”

During the quarter, AWS delivered $35.58 billion in revenue, up 24% from a year earlier and above Wall Street’s consensus estimate of $34.93 billion. According to Jassy, it was AWS’s fastest rate of growth in 13 quarters.

In terms of revenue, Amazon’s cloud business remains far bigger than those of its rivals, but its market share is gradually being eroded by Microsoft Azure and Google Cloud. Last week, Microsoft said Azure grew its revenue by 39%, while Google Cloud’s sales were up 48%, representing its fastest growth rate since 2021. Analysts say Azure and Google Cloud are also growing faster in AI services.

Looking at the current quarter, Amazon said it’s looking for revenue of between $173.5 billion and $178.5 billion, which would represent growth of about 11% to 15%. The midpoint of that range is more or less in line with the Street’s forecast of $175.6 billion.

Amazon said its advertising business continued humming along nicely during the quarter, with revenue rising 23% year-over-year to $21.32 billion, just ahead of the $21.16 billion expected.

Photo: Robert Hof/SiliconANGLE