Amazon’s $200 Billion 2026 AI-Cloud Capex Sends Shares Down 9% as Targets Are Cut

Overview

• AWS revenue growth accelerated to 24% in Q4, and contracted backlog reached about $244 billion, expanding roughly 40% faster than revenue.
• Most of the planned spending is directed to AWS infrastructure and custom AI silicon, including Project Rainier capacity and newly shipped Trainium3 chips.
• Bank of America lowered its price target to $275 while maintaining a Buy rating, and Scotiabank also cut its target while keeping a positive view.
• Amazon ended 2025 with $90.1 billion in cash and $68.8 billion in long-term debt, and reporting indicates it will likely raise additional debt to fund the plan.
• Management guided Q1 revenue to $173.5–$178.5 billion and flagged weaker early-2026 margins, with utilization risk noted given major customers like Anthropic and OpenAI remain unprofitable.