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NEW YORK (AP) — Amazon sales surged 14% during the fourth quarter, helped by strong holiday spending and a better-than-expected growth in its prominent cloud computing unit.
But shares fell 11% in after hours trading on Thursday as investors appeared to be spooked by the Seattle-based tech company’s plans to increase capital spending by nearly 60% to $200 billion from last year’s $128 billion as it sees opportunities in artificial intelligence, robots, semiconductors and satellites. The company’s fourth-quarter profits also were slightly below analysts’ projections.
Wall Street analysts were expecting capital spending to rise to around $147 billion this year, according to FactSet.
Amazon’s CEO Andy Jassy told investors on the call following the earnings release that it anticipates strong long-term return on the invested capital.
“We are continuing to see as fast as we install this capacity, this AI capacity, we are monetizing it,” Jassy said. “So it’s just a very unusual opportunity. I passionately believe that every customer experience that we know of today is going to be reinvented.”
The results come as Amazon is slashing about 16,000 corporate jobs i n the second round of mass layoffs for the e-commerce company in three months. Read Entire Article
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