From Barron's, February 5:
Amazon stock was falling sharply after the company reported slightly worse-than-expected earnings results.
Investors may be worrying about the ability to generate profits from the $200 billion guidance for 2026 capex spending, which was way above the $146.6 billion Street estimate.
Amazon shares were down as much as 10% following the report.
For the December quarter, Amazon reported adjusted earnings per share of $1.95, compared to Wall Street’s consensus estimate of $1.97, according to FactSet. Revenue came in at $213.4 billion, which was ahead of analysts’ expectations of $211.4 billion. Revenue for Amazon’s closely watched cloud unit, AWS, was $35.6 billion versus the $34.9 billion analyst estimate.
Amazon said revenue for the current quarter would be between $173.5 billion and $178.5 billion, versus the $175.6 billion average analyst estimate.
“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,” Amazon CEO Andy Jassy said in a press release....
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