Washington: Amazon.com Inc. said it plans to spend billions more than expected on data centers, chips and other equipment, fueling investor concerns that the company’s massive bet on artificial intelligence will take longer to pay off than anticipated.
The company reported $39.5 billion on property and equipment expenses in the fourth quarter, topping estimates by almost $5 billion, and said its capital expenditures would reach $200 billion this year.
“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, and anticipate strong long-term return on invested capital,” Chief Executive Officer Andy Jassy said in a statement.
The spending will weigh on profit, with Amazon giving a forecast for operating income in the current quarter of $16.5 billion to $21.5 billion. Analysts, on average, estimated $22.2 billion.
Microsoft Corp. and Alphabet Inc., which reported results earlier, also spent more heavily than anticipated, sending their shares down amid mounting worries that demand for AI services don’t warrant the massive outlays.
The shares dropped about 7% in extended trading, after closing at $222.69 in New York. Amazon’s stock had declined 3.5% this year through the Thursday close.
This report is auto-generated from Bloomberg news service. ThePrint holds no responsibility for its content.
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