Amazon Reports Record Q4 Sales, Predicts $200 Billion Capex Boom by 2026

In the fourth quarter of 2025, Amazon reached impressive heights with record sales totaling $213.4 billion, surpassing Wall Street’s expectations. However, the company’s shares dipped in after-hours trading due to a significant forecast of capital expenditures. Amazon anticipates a 50% increase in spending, projecting it at $200 billion for 2026 to enhance its position in the artificial intelligence sector.

Quarterly Financial Performance

Amazon’s year-end sales for the holiday shopping quarter rose by 14%. The company’s net income surged to $21.2 billion, translating to earnings of $1.95 per diluted share. This slight miss on forecasts was overshadowed by a notable uptick in ad revenue, which grew by 23% to reach $21.32 billion.

Advertising and Subscription Services Growth

• Advertising Revenue: $21.32 billion (23% increase)
• Subscription Services Revenue: $13.12 billion (14% increase)

Amazon’s advertising services include various formats like Prime Video ads, display ads, and sponsored products. For the quarter, subscription services, which encompass Amazon Prime memberships and other non-AWS digital offerings, also saw healthy growth.

Investment in Technology and Growth Sectors

Amazon’s President and CEO, Andy Jassy, highlighted a 24% increase in AWS revenue for Q4, amounting to $35.58 billion. This spike marks AWS’s fastest growth rate in 13 quarters. Jassy stated that the company plans extensive investments across AI, chips, robotics, and other sectors, with anticipated returns on capital.

Capital Expenditure Plans

For the full year 2025, capital expenditures reached $131.82 billion. The forecasted capex for 2026 will be predominantly directed toward AWS to maintain competitive advantage.

Workforce Changes and Future Outlook

This financial success coincides with Amazon’s announcement of significant layoffs, affecting 16,000 employees. This marks the second major reduction in workforce, following an earlier cut of 14,000 employees in 2024. In total, approximately 30,000 jobs have been eliminated, representing nearly 10% of the corporate workforce.

Market Expectations

Market analysts anticipated Q4 revenue to reach $211.33 billion, with earnings estimated at $1.97 per share. However, actual revenue and earnings fell slightly short of these expectations.

Prime Video and Streaming Success

Amazon continues to gain momentum with its Prime Video platform, which now reaches over 315 million viewers globally. The platform’s advertisements are currently active in 16 countries. Notably, the fourth season of NFL’s “Thursday Night Football” on Prime Video recorded a 16% year-over-year increase in viewership.

Cinematic Ventures

• Documentary: “Melania” premiered January 30, grossing $7 million domestically while Amazon invested $40 million in its acquisition.
• Streaming Record: More than 31 million viewers tuned in for the Packers-Bears playoff game, marking a high point for NFL streaming.

In 2025, Amazon also achieved record delivery times for Prime members, fulfilling over 8 billion items the same or next day, a remarkable 30% increase compared to 2024.

As Amazon navigates its ambitious growth strategies, the company maintains a focus on technological advancement and market expansion, positioning itself for a robust future.