Amazon earnings: Amazon stock slides after earnings despite strong AWS results and AI momentum

Amazon earnings showed strength in AWS revenue and profits, but shares dropped after hours as investors reacted to broader market weakness and massive future spending plans. Amazon shares fell sharply in after-hours trading following the release of its fourth-quarter earnings, even as its cloud business delivered stronger-than-expected results.

The stock drop came amid a broader global sell-off and renewed investor focus on rising spending. While AWS showed solid growth, Amazon’s heavy investment outlook weighed on the Amazon stock price.



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Why did Amazon stock fall after earnings?

In after-hours trading, Amazon shares tumbled as much as 10%. Combined with a 4% decline during the regular session, the stock was down roughly 8% in the after-market. The move came as global assets sold off broadly, leaving the amzn stock price hovering just above the $200 level, as per a report by CNBC and XTB.

Investors appeared cautious despite strong operating results from Amazon Web Services, focusing instead on the company’s aggressive spending outlook and overall market conditions following the earnings release.

How did AWS perform in the fourth quarter?

Amazon said revenue from its cloud unit rose nearly 24% in the fourth quarter, beating analyst expectations. Amazon Web Services generated $35.58 billion in revenue, topping the $34.93 billion forecast from StreetAccount. AWS accounted for about 17% of Amazon’s total quarterly revenue, as per a report by CNBC.

Operating income at AWS reached $12.47 billion, exceeding consensus estimates of $11.91 billion and representing the majority of Amazon’s overall profits. AWS’ operating margin widened slightly to 35% from 34.6% in the prior quarter, reflecting improved efficiency even as investments continued.


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What role is AI spending playing in investor reaction?

Amazon continues to ramp up investment in artificial intelligence and cloud infrastructure. During the fourth quarter, AWS introduced Nova Forge, offering access to Amazon generative AI models for advanced customization, and announced a $38 billion spending commitment from OpenAI, as per a report by CNBC.

The company also said it expects capital expenditures of $200 billion in 2026, well above Visible Alpha’s $148.86 billion consensus. While AWS added nearly 4 gigawatts of computing capacity in 2025, the scale of future spending raised concerns about near-term pressure on margins, influencing how investors reacted to the Amazon earnings report.

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FAQs

Did Amazon earnings beat expectations?
AWS revenue and operating income exceeded Wall Street estimates in the fourth quarter.

Why did Amazon stock fall despite strong AWS results?
Investors focused on broader market weakness and Amazon’s sharply higher future spending plans.