Amazon announced on Thursday that it plans to invest a staggering $200 billion in capital expenditures this year, a figure that has sparked concerns about the AI spending boom entering an increasingly bubbly phase. The company’s capex forecast exceeded Wall Street expectations by more than $50 billion, leaving some analysts uneasy about whether these massive investments will ultimately pay off.
Mark Mahaney, a tech analyst at Evercore ISI, expressed this uncertainty during a conference call with Amazon executives following the earnings results. “The strong long-term return on investing capital — I think that’s the debate in the market today,” he said. “So could you give us a little bit more insight into how you think investors will be able to see that?”
In response, Amazon CEO Andy Jassy emphasized that new AI capacity is being monetized as quickly as it is deployed, describing the situation as “a very unusual opportunity.” He pointed out that AI adoption is accelerating customers’ shift to the cloud, and noted that AWS’s experience in forecasting demand helps limit wasted capacity.
“This isn’t some sort of quixotic top-line grab,” Jassy explained during the call. “We have confidence that these investments will yield strong returns on invested capital.”
Despite these assurances, Jassy’s comments did little to calm investors. Following the company’s announcement of its outsized spending plans, Amazon shares fell more than 10% in extended trading. Additionally, a profit forecast that missed Wall Street expectations further intensified concerns around the return on investment.
The AI infrastructure buildout among Big Tech companies has entered a breathtaking new phase in recent days. On Wednesday, Google announced it expects capital expenditures of $175 billion to $185 billion in 2026 — well beyond Wall Street estimates. Meta and Microsoft have also raised their capex forecasts.
During Thursday’s Amazon earnings call, analysts pressed executives for more assurances regarding returns on investment. Doug Anmuth from JPMorgan specifically asked Jassy if the company had “financial guardrails” in place to manage the aggressive spending plan.
Jassy reiterated that AI represents an “extraordinarily unusual opportunity” that could reshape the scale of AWS and Amazon as a whole. He highlighted Amazon’s in-house chips, Trainium and Graviton, which are on track to generate more than $10 billion in revenue this year. He also praised the company’s partnership with AI startup Anthropic as having 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.
Describing the AI market as “barbelled,” Jassy explained that heavy spending is taking place on one end by leading AI labs, while productivity-focused enterprise uses occupy the other. He noted that middle-tier enterprise production workloads and new AI-native businesses are still in the early stages but have the potential to become “the largest and the most durable” source of demand as costs decrease and adoption widens.
“The lion’s share of that demand is still yet to come in the middle of that barbell, and that will come over time,” Jassy concluded.
https://www.businessinsider.com/amazon-ai-spending-plan-capex-stuns-wall-street-2026-2