Amazon (AMZN) Shares Drop on $200B 2026 Capex Guidance

Amazon (AMZN) shares fell as much as 10% in after-hours trading following Q4 results that included a $200 billion capital expenditure plan for 2026, up from a mid-$140B Street estimate. The company beat revenue and EPS expectations, with AWS growth at its fastest in 13 quarters and custom chips surging, but the guidance raised free cash flow and return-on-invested-capital concerns. Q1 operating cash flow rose 20% to $139.5B, while free cash flow fell to $11.2B, pressured by $50.7B in PPE for AI. The capex assumes strong long-term returns but also includes $1B of incremental “Amazon Leo” and higher execution costs, pushing investors to question whether the spending reflects customer-driven demand or competitive urgency. AWS remains the emotional centerpiece of the earnings, contributing about 60% of operating profit and amplifying the timing of when the spending pays off.