Amazon's shares fall after announcing surge in capital spending but posts strong 4Q holiday sales

Core Insights - Amazon's sales increased by 14% in the fourth quarter, driven by strong holiday spending and growth in its cloud computing unit [1] - Despite the sales growth, Amazon's shares fell by 11% in after-hours trading due to plans to increase capital spending by nearly 60% to $200 billion from $128 billion last year [2] - Amazon's CEO Andy Jassy expressed confidence in long-term returns on invested capital, highlighting the company's focus on artificial intelligence and other technologies [3] Financial Performance - Amazon's fourth-quarter profits were slightly below analysts' expectations, contributing to the decline in share price [2] - Amazon Web Services (AWS) experienced a 24% growth in the fourth quarter, marking the fastest growth in 13 quarters, following 20% growth in the third quarter and 17.5% in the second quarter [7] Workforce Changes - Amazon is undergoing significant layoffs, cutting about 16,000 corporate jobs, with an additional 5,000 retail workers due to the closure of Amazon Go and Amazon Fresh stores, totaling over 30,000 job cuts since the push for AI-driven changes began [4][5] Competitive Landscape - Amazon faces pressure to demonstrate that AWS is competitive with Microsoft Azure and Google Cloud, as these companies also ramp up their investments in artificial intelligence [6]