Amazon said on Thursday it plans to invest about $200bn in 2026, well above market expectations, which on average expected $144.7 billion. The move puts the group at the heart of the race to build artificial intelligence infrastructure led by Big Tech, alongside Microsoft, Google and Meta. Together, the four companies are expected to spend over $500bn this year on building data centers, producing chips and strengthening their networks.

Despite that ambition, Amazon shares fell more than 7% in after-hours trading, with investors also reacting to an operating profit outlook below expectations. The group is targeting operating profit of between $16.5bn and $21.5bn in Q1, versus a consensus of $22.04bn. Analysts are becoming increasingly demanding about tangible returns from massive AI investments, now a crucial yardstick in valuing listed technology giants.

Amazon is continuing efforts to ease capacity constraints at its cloud unit, AWS, which accounts for between 15% and 20% of revenue but over 60% of operating profit. The recently launched "Rainier" AI infrastructure project relies on a large-scale rollout of Trainium2 chips, designed in particular to power Anthropic's Claude chatbot. At the same time, the group is continuing to strengthen its online retail and grocery operations, with initiatives targeting rural areas, faster delivery and expansion of its Whole Foods network. A new 225,000-square-foot megastore is also set to take on Walmart and Costco.