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Amazon slides as it misses on Q4 earnings, gives downbeat profit guidance

The tech giant also forecast it would spend $200 billion on capex in 2026.

2/5/26 4:07PM

Amazon shares are sliding after the company missed Wall Street’s expectations for fourth-quarter earnings, gave downbeat first-quarter profit guidance, and forecast a whopping $200 billion of capital expenditure this year.

The stock is down almost 8% in premarket trading, as of 5:50 a.m. ET.

For the fourth quarter, Amazon’s earnings per share came in at $1.95, falling short of analysts’ consensus estimate of $1.97, according to FactSet.

Sales grew 14% to $213.4 billion, ahead of analysts’ expectations of $211.43 billion.

The tech giant also forecast first-quarter operating income of $16.5 billion to $21.5 billion, well below the Wall Street forecast for $22.18 billion. It sees sales landing between $173.5 billion and $178.5 billion, compared with analysts’ expectations for $175.62 billion.

Amazon’s AWS cloud business saw revenue jump 24% year on year to $35.6 billion, powered by huge demand for AI. The Street was expecting $34.9 billion.

The company’s capital expenditure — a number that’s been watched closely in recent quarters as tech giants spend vast sums of money to build the infrastructure to power AI — totaled $39.5 billion, topping analysts’ forecasts of $34.37 billion.

Amazon continued a trend of Big Tech companies laying out plans for monster capital spending, saying it expects to invest about $200 billion in capital expenditure this year.

On the earnings call, Amazon CEO Andy Jassy said that the company had a backlog of $244 billion worth of AWS revenue, up 40% year over year.

Some highlights for the quarter:

The Trainium and Gravitron custom AI chips have a combined annual revenue of over $10 billion, growing fast.
Trainium4 chips are expected to start delivery in 2027.
Physical-store sales came in at $5.85 billion.
Advertising revenue was $21.37 billion, up 23% year on year.
Subscription revenue (Amazon Prime, audiobooks, etc.) was up 14% year on year, at $13.1 billion for the quarter.

Last week, Amazon announced it would reduce its corporate workforce by an additional 16,000 employees, after laying off 14,000 workers in October.

Go Deeper: For hyperscalers like Amazon, how much capex is too much?

Matt Phillips7h

Oil settles Friday at highest level since start of war

US oil prices moved higher in afternoon trading Friday, sapping strength from the stock market as they posted their highest close since the start of the Iran war.

After another day where the Strait of Hormuz was essentially closed to global tanker traffic, US futures for West Texas Intermediate settled up 3.1% at $98.71 a barrel for an 8.6% weekly gain, per Dow Jones data.

American officials have discussed using the US Navy to escort tankers through the narrow waterway between Iran and Oman, but have said plans for such convoys are not ready yet. However, it is unclear if military convoys would bring an end to the war-related dislocations in the oil market.

“It could help,” Tom Liles, senior vice president of upstream research at energy consulting firm Rystad, told Sherwood News in a recent interview. “It could also go in a lot of different directions if a Navy ship is hit or if a tanker is hit.”

Oil Posts Weekly Gains As Middle East Conflict Drags On

Tasha Matsumoto

Stocks post third straight week of losses as Brent crude surges above $100

Stocks wiped out early gains to close lower amid the ongoing war in Iran.

Matt Phillips11h

Memory stocks rebound off last weeks losses

Memory stocks Micron, Sandisk, Western Digital, and Seagate Technology Holdings rose again Friday, putting these crucial providers of chips for AI inference work on track for big weekly gains after last week’s steep losses following the outbreak of war with Iran.

There’s no obvious trigger for the move higher for these shares this week, other than a bit of a recovery in the AI trade more broadly — AI beneficiaries like IT cable and connections maker Amphenol and custom chip and networking company Marvell Technology clawed back some gains this week — perhaps due Oracle’s earnings earlier, and some mean reversion to boot.

Micron is due to report earnings after the close of trading on Wednesday, with the company catching a couple price target hikes this week, including one from Wedbush on Friday.

Sandisk is something of a different story, as its enormous gains over the last 12 months — roughly 1,200% — have made it a momentum play beloved by the retail crowd.

It was up about 20% this week at around 11 a.m. ET. And its nearly 170% gain this year keeps the stock on top of the S&P 500, in terms of price performance.

Luke Kawa

11h

The S&P 500’s internals are awful... while it’s still less than 5% from its record closing high

The breadth of negative momentum within the index’s constituents is even worse than at the tariff-induced market bottom in April 2025.