Amazon on Thursday projected a surge of more than 50% in capital expenditures this year, joining its peers in a spending spree to build out artificial-intelligence infrastructure, and sending its shares down 11.5% in after-hours trading.

As the shares sputtered on news that Amazon would be pumping $200 billion into boosting its AI efforts in 2026, CEO Andy Jassy struck a defensive tone during the company's call with investors, a contrast to the more self-assured Alphabet executives on Wednesday as Google showed resilience in developing AI software.

"As a reminder," said Jassy, referring to the results of cloud platform Amazon Web Services, "it's very different having 24% year-over-year growth on $142 billion annualized run rate, than to have a higher-percentage growth on a meaningfully smaller base, which is the case with our competitors."

AWS's revenue grew to $35.6 billion in the December quarter, while Google Cloud grew 48% to $17.75 billion. Microsoft's Azure surged 39% in the same period.

Amazon's results are the latest sign that Big Tech will not be hitting the brakes any time soon on hefty AI investments. Amazon shares closed down 4.4% during regular trading as worries deepened about the enormous cost of the artificial-intelligence boom.

The top four hyperscalers - Amazon, Microsoft, Google and Meta - are expected to collectively spend more than $630 billion this year.

Tech earnings over the past few days have shown Wall Street has a clear message for tech firms: Soaring AI spending can continue only if companies show commensurate operational or financial returns.

Amazon also forecast first-quarter operating income of between $16.5 billion and $21.5 billion, baking in roughly $1 billion related in part to higher costs at its high-speed satellite internet business, Leo. Analysts estimated a profit of $22.04 billion, according to LSEG.

"The market just dislikes the substantial amount of money that keeps getting put into capex for these growth rates," said Dave Wagner, portfolio manager at Aptus Capital Advisors.

Analysts largely hailed Google's eye-popping capex forecast as the company delivered stellar growth in its cloud revenue - though its shares fell 3% on Thursday - as they did Meta's capex plans. But investors punished Microsoft's stock last week after its cloud unit growth just squeaked past estimates.

Amazon's high projected spending in 2026 will be more than operating cash flow, said Asit Sharma, senior investment analyst at The Motley Fool. D.A. Davidson analyst Gil Luria said: "Amazon has to invest at these levels just to stay in the race."

Although a smaller unit for Amazon, contributing just 15% to 20% of overall sales, Amazon Web Services generates over 60% of the company's operating profit. Its fourth-quarter sales growth of 24% was the biggest in 13 quarters, but that was overshadowed by the company's capex surge.

Jassy spent much of the nearly hour-long post-earnings call boasting about AWS's new offerings. He noted, for instance, that AWS has more than 1,000 new applications it launched or will soon, as well as a competitive AI-based customer service bot and live sports alerts.

"We are being incredibly scrappy," said Jassy. "In every one of our businesses, you see a very broad use of AI to improve the customer experience, and, in many cases, just to completely reinvent what was possible before."

Amazon has also been investing in its e-commerce business, seeking to draw more customers by expanding to rural areas in the United States, boosting its same-day and next-day delivery capabilities and deepening its push into perishable foods.

But Amazon took $610 million in asset impairments related primarily to its physical stores unit, which includes Amazon Go and Amazon Fresh grocery stores. The company is retreating from physical stores by closing all of its Fresh and Go stores and converting some into Whole Foods locations.

Its latest bet is an expansion of Whole Foods' footprint and a 225,000-square-foot mega-store meant to compete with the likes of Walmart and Costco.

Amazon's advertising business continues to be a highlight. Sales jumped 22% in the fourth quarter to $21.3 billion and Jassy said the company has added AI options to Prime Video so that marketers can create ads with limited human interaction.

The Seattle-based company laid off 14,000 corporate employees in the quarter and earlier this year laid off another 16,000, which it has said was necessary due to efficiencies gained from AI use and a desire to change corporate culture. Still, it finished the year with 21,000 more employees than the same period in 2024.