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. Amazon said in an emailed statement last week that AI was “not the reason behind the vast majority of these reductions.” Rather, the cuts had more to do with eliminating layers to drive speed.
Separately, Amazon said last week it would cut about 5,000 retail workers, according to notices it sent to state workforce agencies in California, Maryland and Washington, resulting from its decision to close almost all of its Amazon Go and Amazon Fresh stores.
That’s on top of a round of 14,000 job cuts in October, bringing the total to well over 30,000 since Amazon's Jassy first signaled a push for AI-driven organizational changes.
Analysts are analyzing retailers’ performances for insight into how shoppers spent during the holidays and what’s in store for 2026.
Amazon is also under pressure to shore up confidence that its computing arm Amazon Web Services is just as powerful as Microsoft’s Azure and Google’s Google Cloud platform.
Amazon delivered 24% growth for AWS in the fourth quarter, the fastest in 13 quarters, the company said. That followed a 20% growth in the third quarter and a 17.5% increase in the second quarter. In comparison, Google parent Alphabet said Wednesday that its cloud business registered a 48% increase, or nearly $18 billion in revenue.
Meta, Apple and other Big Tech firms are expected to ramp up their spending on artificial intelligence this year. After investing $91 billion into capital expenditures devoted mostly to AI, Alphabet said Wednesday that it expects to double down by spending another $175 billion to $185 billion this year.
Amazon also continues to invest in its speedy fulfillment network, through a combination of robotics, AI technology and more efficient warehousing.
Amazon's new service called Amazon Now, an ultra-fast delivery that offers delivery on thousands of items in 30 minutes or less, is now available in various cities in India, Mexico and the United Arab Emirates and is being tested in several communities in the U.S. and the United Kingdom, the company said.
Amazon is also expanding its same-day grocery delivery to more than 2,300 cities and towns across the U.S.
Jassy told investors the company continues to see strong customer response to everyday essentials and groceries.
Meanwhile, Amazon is closing almost all of its Amazon Go and Amazon Fresh locations as it narrows its focus on food delivery and its grocery chain, Whole Foods Market.
Some of the shuttered stores will be converted into Whole Foods locations, the company said in a blog post last week.
Amazon reported net income of $21.2 billion, or $1.95 per share, for the three-month period ended Dec. 31. That compares with $20 billion, or $1.86 per share, in the year-ago quarter.
Revenue rose to $213.4 billion in the fourth quarter, compared with $187.8 billion in the year-ago period.
Analysts were expecting $1.97 per share on sales of $211.4 billion, according to analysts polled by FactSet.
Revenue from Amazon Web Services reached $35.6 billion. Analysts were expecting $34.9 billion.
Product sales during the holiday period rose 9.4%, the company said.
The company said that it expects sales to be between $173.5 billion and $178.5 billion for current quarter.
Analysts are projecting $175.6 billion.
FILE - The Amazon logo is displayed at a news conference in New York on Sept. 28, 2011. (AP Photo/Mark Lennihan, File)
FILE - People walk out of an Amazon Go store in Seattle, March 4, 2020. (AP Photo/Ted S. Warren, File)
SAN JOSE, Calif. (AP) — When it comes to being an offensive coordinator in the NFL, few coaches have fared better than New England's Josh McDaniels.
As a head coach, it's been a completely different story.
The six-time Super Bowl champion is back in the title game after taking a one-year break from coaching following his second firing as a head coach with no thoughts now on whether he will ever get a third chance.
“Every day’s one day at a time for me now,” McDaniels said this week. "I think I’m where I’m supposed to be. I’m incredibly happy to be here and doing what I’m doing. I love my job. I love the role that I have. I love the group that I’m with. So whatever that plan is down the road, we’ll figure that out. But I couldn’t be more happy with where I’m at.”
Being at the Super Bowl as a Patriots assistant is familiar territory for McDaniels as he prepares second-year quarterback Drake Maye and the offense for Sunday's matchup against the Seattle Seahawks' stellar defense.
McDaniels' work with Maye helped him win the NFL AP Assistant Coach of the Year award that was announced on Thursday night at “NFL Honors.”
Ever since starting in the NFL as a low-level assistant with Bill Belichick's Patriots in the 2001 season, McDaniels has been a frequent participant in the Super Bowl with this year's game being his 10th of his career.
New England won it all his first season, went back-to-back in the 2003-04 seasons with McDaniels as a defensive assistant and quarterbacks coach and he then forged a career as one of the top coordinators in the NFL starting in 2006.
He coordinated a record-setting offense in 2007 led by Tom Brady and Randy Moss and was the coordinator for three more Super Bowl winners in the 2010s.
McDaniels has coordinated an offense that finished in the top 10 in scoring 13 times in 15 seasons with this season the fourth time he has been in the top two.
“I think he’s so great at preparing me during the week for those little things that come up during the games, and also at the same time of explaining why, ‘Hey, we’re doing this because of what they do, or we’re doing this because I think we can take advantage of how they do this,'" Maye said. “He’s great at coaching my position, and he’s one of the best in the business, and just thankful every day to work with him.”
McDaniels' time as a head coach hasn't been nearly as successful. He was hired for his first stint in 2009 by the Denver Broncos and got off to a 6-0 start that included a win over Belichick and the Patriots. Denver finished 8-8 that season and McDaniels was fired with a 3-9 record in 2010, losing 17 of his final 22 games as coach.
McDaniels was also fined $50,000 by the NFL for not reporting that the team’s director of video operations videotaped a San Francisco 49ers walk-through practice before the teams played a game in 2010 in London. The investigation determined that McDaniels did not know about the taping in advance and declined to view it, but he was punished for not immediately reporting the infraction to the league.
McDaniels nearly got another shot at being a head coach after the 2017 season but pulled out at the last minute after agreeing to take over the Indianapolis Colts.
McDaniels then did get his second chance after helping rookie Mac Jones reach the playoffs in 2021 with New England when the Las Vegas Raiders hired him in 2022. But once again he didn't last two full seasons, getting fired midway through the 2023 campaign with a 9-16 record.
“There’s so many things you learn in this league when you have that opportunity,” McDaniels said. “It’d be hard to boil it down to one or two things. Winning in this league is a culmination of a lot of things and certainly when you don’t win enough, we’re accountable for that. So that’s the bottom line when you’re a head coach in a National Football League. You’re responsible to provide a winning formula and so I’m happy to be part of one now.”
Despite those failures, McDaniels is still widely respected for his work as a coordinator that some around the game believe he could still warrant a third chance at a head coach job.
“I think he’s brilliant," NBC analyst Cris Collinsworth said. "Honestly, if I had a football team, and I know it hasn’t always worked out, he would be one of my lead candidates to be a head coach again. I know that will sound outrageous to some. It doesn’t to me.”
McDaniels spent his sabbatical year in 2024 touring NFL and college practices, spending time with coaches such as Andy Reid, Sean McDermott and DeMeco Ryans in the NFL, as well as college coaches such as Ryan Day, Bill O'Brien and Lincoln Riley.
McDaniels said he took a lot from each stop, ranging from play calls to how to structure practice.
“There’s other ways to do things,” he said. “You always know that when you’re coaching in one place for quite a while. But the National Football League is so tight-lipped about everything. We don’t get to go and see other people practice much. ... It was really an opportunity for me to learn from some of the best guys in college and pro football and try to implement them into our process whenever I came back to coaching and had no idea where it would be. But just was incredibly blessed that I had an opportunity.”
AP Pro Football Writer Arnie Stapleton in Denver contributed.
AP NFL: https://apnews.com/hub/nfl
New England Patriots quarterback Drake Maye, left, signals after a field goal while standing with offensive coordinator Josh McDaniels during an NFL football availability, Thursday, Jan. 29, 2026, in Foxborough, Mass. (AP Photo/Charles Krupa)
