Amazon Q4 Earnings Miss Estimates, Shares Slide on $200B Capex Plan

Core Insights - Amazon.com (AMZN) reported fourth-quarter 2025 earnings of $1.95 per share, a 5% increase year-over-year, but fell short of consensus estimates by 1.52% [1] - Net sales reached $213.4 billion, a 14% year-over-year increase, exceeding management's guidance and consensus estimates [2] - The company's net income was $21.2 billion, up 6% year-over-year, while operating income was impacted by special charges totaling $2.4 billion [3] Financial Performance - Product sales increased 9% year-over-year to $90 billion, while service sales rose 17% to $123.4 billion [4] - AWS revenues grew 24% year-over-year to $35.6 billion, marking the fastest growth rate in 13 quarters [5] - Operating income was reported at $25 billion, which included special charges; excluding these, it would have been $27.4 billion [3][26] Segment Performance - North America revenues rose 10% year-over-year to $127.1 billion, while international revenues increased 17% to $50.7 billion [4] - AWS segment operating income was $12.5 billion, up 17% year-over-year, with an operating margin of 35% [27] Advertising and Third-Party Sales - Sales from advertising services increased 22% year-over-year to $21.3 billion, reflecting strong performance in digital advertising [8] - Sales generated by third-party seller services rose 11.2% year-over-year to $52.8 billion, with worldwide paid units growing 12% [7] AI and Cloud Innovations - AWS's custom chips business has an annual revenue run rate of over $10 billion, growing at triple-digit percentages [16] - Amazon introduced Graviton5, its most advanced CPU for cloud workloads, which is up to 40% more price-performant than leading x86 processors [19] Delivery and Logistics - Amazon achieved record delivery speeds for Prime members, with nearly 70% more items delivered same day compared to the previous year [23] - The company expanded its ultra-fast delivery services to various regions, including India and Mexico [24] Capital Expenditures and Guidance - Amazon plans to invest approximately $200 billion in capital expenditures in 2026, primarily for AWS, a significant increase from $125 billion in 2025 [30] - For Q1 2026, Amazon anticipates net sales between $173.5 billion and $178.5 billion, reflecting 11% to 15% growth year-over-year [31]