Stock Market Update

[BRIEFING.COM] The major averages are little changed from previous levels as tech names lead a broad rebound effort. 

Amazon (AMZN 205.02, -17.67, -7.93%) is under pressure today after reporting fiscal Q4 results last night. The company missed on EPS, while revenue delivered only modest upside, rising 13.6% year-over-year to $213.39 billion. Since Amazon provides only GAAP EPS, it is also helpful to examine operating income as a clearer gauge of profitability. Q4 adjusted operating income of $27.4 billion exceeded prior guidance of $21-26 billion, while Q1 revenue guidance came in roughly in-line.

The primary concern from the report centered on capital expenditures. Amazon expects capital expenditure to reach roughly $200 billion in 2026, the majority of which will be directed toward AWS infrastructure. Management cited extremely strong demand for both core and AI workloads, noting that AWS is monetizing new capacity as quickly as it can be deployed.

Capital expenditure totaled $77.7 billion in 2024 and $128.3 billion in 2025, so the planned $200 billion capital expenditure in 2026 represents a sharp acceleration. Investors are worried about margin pressure, AI bubble risk, and potential debt or dilution, especially after AMZN filed a mixed securities shelf offering.