Amazon said Thursday it plans a staggering $200 billion in capital expenditures this year, sparking concern that the AI spending boom has entered an even more bubbly stage.
The company’s capex forecast was more than $50 billion above Wall Street expectations. That left some analysts uneasy about whether these huge investments will pay off.
“The strong long-term return on investing capital — I think that’s the debate in the market today,” Mark Mahaney, a tech analyst at Evercore ISI, said during a conference call with Amazon executives following the results. “So could you give us a little bit more insight into how you think investors will be able to see that?”
Amazon CEO Andy Jassy said new AI capacity is being monetized as quickly as it is deployed, calling it “a very unusual opportunity,” and argued that AI adoption is accelerating customers’ shift to the cloud. He added that AWS’ experience forecasting demand helps limit wasted capacity.
“This isn’t some sort of quixotic top-line grab,” Jassy said during the call. “We have confidence that these investments will yield strong returns on invested capital.”
Jassy’s comments did little to calm investors. Amazon shares fell more than 10% in extended trading after the company detailed its outsized spending plans. A profit forecast also missed Wall Street expectations, adding to ROI concerns.
Big Tech’s AI infrastructure buildout has entered a new, breathtaking phase in recent days. On Wednesday, Google said it expects capex of $175 billion to $185 billion in 2026, well ahead of Wall Street estimates. Meta and Microsoft also raised capex.
During Thursday’s Amazon earnings call, other analysts pressed for assurances around returns on investment. JPMorgan’s Doug Anmuth asked Jassy whether the company had “financial guardrails” in place for the spending plan.
Jassy said AI represents an “extraordinarily unusual opportunity” that could reshape the scale of AWS and Amazon. He said the company’s in-house chips, Trainium and Graviton, are on track to generate more than $10 billion in revenue this year and added that its partnership with Anthropic has gone “very well.”
“We see this as an unusual opportunity, and we are going to invest aggressively here to be the leaders like we’ve been the last number of years,” Jassy said.
Jassy described the AI market as “barbelled,” with heavy spending by leading AI labs on one end and productivity-focused enterprise uses on the other.
He said the middle — enterprise production workloads and new AI-native businesses — remains early but could become “the largest and the most durable” source of demand as costs fall and adoption broadens.
“The lion’s share of that demand is still yet to come in the middle of that barbell, and that will come over time,” he said.
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