Amazon to Invest $200 Billion in Capital Expenditures by 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Should l Buy AMZN?
Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly.AI-DRIVEN SPENDING PLANS:Amazonis under pressure on Friday after the company's aggressive spending outlook caught investors off guard, adding to growing concerns that the AI boom may be edging into bubble territory. The e‑commerce giant on Thursday joined the rest of Big Tech in outlining plans for a major ramp‑up in capital expenditures. Amazon reported Q4 EPS with charges $1.95, versus consensus of $1.96, and Q4 AWS net sales of $35.58B vs. $28.79B last year. The company also said it sees Q1 revenue of $173.5B-$178.5B, versus consensus $175.24B, and that it expects to invest $200B in capital expenditures in 2026, with most of FY26 investments to be in AI.VIBES APP:Metais testing a standalone Vibes app, the companyto TechCrunch, Aisha Malik reports. "Following the strong early traction of Vibes within Meta AI, we are testing a standalone app to build on that momentum," Meta said in an emailed statement. "We've seen that users are increasingly leaning into the format to create, discover, and share AI-generated video with friends. This standalone app provides a dedicated home for that experience, offering people a more focused and immersive environment. We will look to expand the app further based on what we learn from the community."NEW LEVEL OF RISK:The groundwork for the merger of TeslaCEO Elon Musk's SpaceX and xAI has been underway, with the two companies signing a merger agreement to create a $1.25T company on January 31, Alexander Saeedy, Corrie Driebusch, Becky Peterson, and Micah Maidenberg of The Wall Street Journal. The merger represents a level of risk-taking for Musk, with him betting on his plan for the convergence of AI and space as well as a wage on unproven technology deployed on a vast scale.WINTER OLYMPICS:Snowboarder Maddie Mastro and other athletes are using a new AI tool powered by GoogleDeepMind's computer vision models to prepare for the 2026 Winter Olympics, The Wall Street Journal's Isabelle Bousquette. The AI analyzes video footage of athletes and then maps data like speed, angles, rotations and total airtime onto it.AI HEALTH COACH:Appleis winding down plans for a virtual health coach as part of efforts to rethink how the tech giant approaches the market for wellness services, Bloomberg's Mark Gurman, citing people with knowledge of the matter. The effort, code-named Mulberry, was scaled back in recent weeks, and the company now intends to take some of the features it planned for the AI-powered coach and roll them out piece by piece over time within its Health app, the author says.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.69 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
47 Analyst Rating
46 Buy
1 Hold
0 Sell
Strong Buy
Current: 222.690
Low
250.00
Averages
294.69
High
340.00
Current: 222.690
Low
250.00
Averages
294.69
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AMAZON STOCK FALLS 10% IN FRANKFURT FOLLOWING ANNOUNCEMENT OF SIGNIFICANT CAPITAL EXPENDITURE IN EARNINGS REPORT
Amazon Shares Drop: Amazon's shares fell by 10% in Frankfurt following the announcement of significant capital expenditures.
Impact of Results: The decline in stock price is attributed to investor reactions to the company's financial results and spending plans.
See More
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- Asset Impairments: The company reported $610 million in asset impairments related to physical stores.
See More
US Job Market Remains Stagnant Amid Layoffs
- Surge in Layoff Plans: January 2026 saw the highest layoff plans since 2009, indicating a severe job market situation that could lead to further economic deterioration, impacting consumer confidence and spending.
- Weak Job Additions: The private sector added only 22,000 jobs, significantly lower than the 140,000 added during the same period last year, suggesting a sluggish economic recovery that may lead to decreased household income and consumer spending.
- Increase in Unemployment Claims: Initial claims for unemployment benefits unexpectedly rose to 231,000 in the last week of January, reflecting the impact of severe winter weather on the job market, potentially exacerbating economic uncertainty.
- Disconnection Between Growth and Employment: Despite GDP growth reaching an annual rate of 4.4% in Q3 last year, challenges remain for low-income households, highlighting a “K-shaped” recovery that may exacerbate social inequality.
See More
Investment Prospects for Amazon and Booking Holdings
- Amazon's Innovation Edge: Amazon's online retail business maintains a durable competitive advantage through its extensive infrastructure and same-day delivery services, with its Rufus AI shopping assistant reaching 250 million active users in Q3 and projected to generate $10 billion in incremental annual sales by 2025.
- Advertising Revenue Surge: Amazon's advertising services have achieved an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, positioning the company to benefit as brands shift ad spending to digital platforms.
- Cloud Service Profitability: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing roughly half of the company's profits, with investments in custom chips and data center capacity keeping it at the forefront of AI services, and analysts expect earnings per share to grow at an annualized rate of 17% in the coming years.
- Booking Holdings' Market Position: Booking Holdings attracts users through loyalty rewards and its Connected Trips initiative, achieving 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue, with management targeting an 8% annual growth rate moving forward.
See More
Investment Potential of Amazon and Booking Holdings
- Amazon's Market Advantage: Amazon's competitive edge in e-commerce stems from its extensive infrastructure and same-day delivery services, with its Rufus AI shopping assistant reaching 250 million active users in Q3, projected to generate $10 billion in incremental annual sales by 2025, further solidifying its market leadership.
- Advertising Revenue Growth: Amazon's advertising services have an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, as brands shift ad spending to digital platforms, significantly enhancing its overall profitability.
- Strong Cloud Computing Business: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing nearly half of the company's profits, with investments in custom chips and data center capacity maintaining its competitive edge in the AI services market, expected to continue driving profit growth.
- Sustained Growth for Booking Holdings: Booking Holdings recorded 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue and a 19% increase in adjusted earnings per share, with plans to achieve 8% annual growth in gross bookings and revenue, reflecting strong market demand and pricing power.
See More
Investment Potential of Amazon and Booking Holdings
- Amazon's Innovation Edge: Amazon's online retail business maintains a competitive advantage through its extensive infrastructure and same-day delivery, with its Rufus AI shopping assistant reaching 250 million users in Q3 and projected to generate $10 billion in incremental annual sales by 2025.
- Advertising Revenue Surge: Amazon's advertising services have achieved an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, positioning the company favorably as brands shift ad spending to digital platforms.
- Cloud Services as Profit Engine: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing roughly half of the company's profits, with investments in custom chips and data center capacity keeping it at the forefront of AI service delivery.
- Booking Holdings' Sustained Growth: Booking Holdings recorded 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue, with management targeting 8% annual growth in gross bookings and revenue, translating to a 15% increase in adjusted earnings per share.
See More
AMAZON STOCK FALLS 10% IN FRANKFURT FOLLOWING ANNOUNCEMENT OF SIGNIFICANT CAPITAL EXPENDITURE IN EARNINGS REPORT
Amazon Shares Drop: Amazon's shares fell by 10% in Frankfurt following the announcement of significant capital expenditures.
Impact of Results: The decline in stock price is attributed to investor reactions to the company's financial results and spending plans.
See More
AMAZON: Q4 OPERATING INCOME REFLECTS $730 MILLION IN ESTIMATED SEVERANCE EXPENSES AND $610 MILLION IN ASSET IMPAIRMENTS FROM PHYSICAL STORES - PRESENTATION
- Q4 Operating Income: Amazon's Q4 operating income includes an estimated $730 million in severance costs.
- Asset Impairments: The company reported $610 million in asset impairments related to physical stores.
See More
US Job Market Remains Stagnant Amid Layoffs
- Surge in Layoff Plans: January 2026 saw the highest layoff plans since 2009, indicating a severe job market situation that could lead to further economic deterioration, impacting consumer confidence and spending.
- Weak Job Additions: The private sector added only 22,000 jobs, significantly lower than the 140,000 added during the same period last year, suggesting a sluggish economic recovery that may lead to decreased household income and consumer spending.
- Increase in Unemployment Claims: Initial claims for unemployment benefits unexpectedly rose to 231,000 in the last week of January, reflecting the impact of severe winter weather on the job market, potentially exacerbating economic uncertainty.
- Disconnection Between Growth and Employment: Despite GDP growth reaching an annual rate of 4.4% in Q3 last year, challenges remain for low-income households, highlighting a “K-shaped” recovery that may exacerbate social inequality.
See More
Investment Prospects for Amazon and Booking Holdings
- Amazon's Innovation Edge: Amazon's online retail business maintains a durable competitive advantage through its extensive infrastructure and same-day delivery services, with its Rufus AI shopping assistant reaching 250 million active users in Q3 and projected to generate $10 billion in incremental annual sales by 2025.
- Advertising Revenue Surge: Amazon's advertising services have achieved an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, positioning the company to benefit as brands shift ad spending to digital platforms.
- Cloud Service Profitability: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing roughly half of the company's profits, with investments in custom chips and data center capacity keeping it at the forefront of AI services, and analysts expect earnings per share to grow at an annualized rate of 17% in the coming years.
- Booking Holdings' Market Position: Booking Holdings attracts users through loyalty rewards and its Connected Trips initiative, achieving 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue, with management targeting an 8% annual growth rate moving forward.
See More
Investment Potential of Amazon and Booking Holdings
- Amazon's Market Advantage: Amazon's competitive edge in e-commerce stems from its extensive infrastructure and same-day delivery services, with its Rufus AI shopping assistant reaching 250 million active users in Q3, projected to generate $10 billion in incremental annual sales by 2025, further solidifying its market leadership.
- Advertising Revenue Growth: Amazon's advertising services have an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, as brands shift ad spending to digital platforms, significantly enhancing its overall profitability.
- Strong Cloud Computing Business: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing nearly half of the company's profits, with investments in custom chips and data center capacity maintaining its competitive edge in the AI services market, expected to continue driving profit growth.
- Sustained Growth for Booking Holdings: Booking Holdings recorded 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue and a 19% increase in adjusted earnings per share, with plans to achieve 8% annual growth in gross bookings and revenue, reflecting strong market demand and pricing power.
See More
Investment Potential of Amazon and Booking Holdings
- Amazon's Innovation Edge: Amazon's online retail business maintains a competitive advantage through its extensive infrastructure and same-day delivery, with its Rufus AI shopping assistant reaching 250 million users in Q3 and projected to generate $10 billion in incremental annual sales by 2025.
- Advertising Revenue Surge: Amazon's advertising services have achieved an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, positioning the company favorably as brands shift ad spending to digital platforms.
- Cloud Services as Profit Engine: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing roughly half of the company's profits, with investments in custom chips and data center capacity keeping it at the forefront of AI service delivery.
- Booking Holdings' Sustained Growth: Booking Holdings recorded 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue, with management targeting 8% annual growth in gross bookings and revenue, translating to a 15% increase in adjusted earnings per share.
See More
