Amazon.com Inc (NASDAQ:AMZN) stock fell 7.97% (As on February 6, 11:31:41 AM UTC-4, Source: Google Finance) after the company reported a mixed quarterly performance and increased its spending plans for 2026 by over 50%. Revenue from the Amazon Web Service ($35.58 billion) and advertising ($21.32 billion), were largely in-line with expectations. AWS revenue growth of 24% was higher than the 21.4% estimate from analysts and the fastest growth in 13 quarters. What worried the street further was the management commentary that it plans to spend up to $200 billion this year, as it invests aggressively in to data centers and other infrastructure to meet the rising demand for AI services. The $200 billion figure is higher than the $131 billion it spent last year and well above the $146.6 billion that analysts were working with.

Moreover, AWS growth accelerated to 24%, marking the fastest growth in 13 quarters, with AWS now a $142 billion annualized run rate business. Amazon’s AI and custom silicon businesses, including Graviton and Trainium, are experiencing strong demand and significant growth, with Trainium being a multi-billion dollar annualized run rate business. The company continues to expand its selection, adding over 400 new beauty brands and new fashion brands, and is seeing strong growth in Everyday Essentials and grocery categories. Amazon Ads generated $21.3 billion in revenue for the quarter, growing 22% year over year, with strong growth in Prime Video ads and innovative AI-driven ad solutions. However, the retail business faces competitive pressures, requiring aggressive pricing strategies and investments to enhance customer experience and drive online retail demand. Amazon’s rapid expansion and investment in areas like Amazon Leo and quick commerce could strain resources and require careful management to ensure long-term returns.

AMZN in the fourth quarter of FY25 has reported the adjusted earnings per share of $1.95, missing the analysts’ estimates for the adjusted earnings per share of $1.97. The company had reported the adjusted revenue growth of 12 percent to $213.39 billion in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $211.33 billion.

For the ongoing quarter, Amazon expects sales to range between $173.5 billion and $178.5 billion, a growth between 11% to 15% from last year. Analysts were working with a figure of $175.6 billion. The results come amidst continued layoffs at the company, with over 16,000 layoffs this week, following around 14,000 being culled last October.