Amazon is undertaking its largest capital-spending program in company history, with an estimated $220 billion in capital expenditures this year. CEO Andy Jassy raised this forecast from an initial $200 billion estimate in July.
This extensive investment includes a significant commitment to artificial intelligence infrastructure. Amazon Web Services and Nvidia announced on Aug. 26 plans to integrate two million more Nvidia graphics processing units into AWS infrastructure during 2027 and 2028. This builds on earlier plans to deploy over one million GPUs starting in 2026.
Amazon's stock performance shows a clear pattern during heavy investment cycles: the two worst stock years in the past 15 occurred when the company reported net losses in the midst of major spending pushes. Both were followed by substantial share price recoveries.
In 2014, Amazon's capital expenditures reached $4.9 billion, a 42 percent year-over-year increase and five times the amount spent in 2010. Despite 20 percent sales growth to $89 billion, operating income narrowed to $178 million, and the company reported a net loss of $241 million. The stock declined 22 percent that year.
The following year, 2015, reversed course sharply. Operating income surged more than tenfold to $2.2 billion, and Amazon returned to profitability. The stock rose 118 percent—its best annual performance in 15 years.
A larger investment and loss cycle occurred in 2022. Capital expenditures hit a then-record $58.3 billion. Amazon reported a $2.7 billion annual net loss even as revenue increased 9 percent year-over-year. Operating income halved to $12.2 billion, compounded by a $12.7 billion pre-tax valuation loss from its Rivian Automotive investment. The stock lost approximately half its value during this period.
By 2023, Amazon's financial health rebounded, with net income reaching $30.4 billion. The company's shares reflected this recovery, climbing 81 percent over the year.
Other years of high capital spending—2021 ($55.4 billion), 2024 ($77.7 billion), and 2025 ($128.3 billion)—did not result in negative net income. Stock returns in these years were 2 percent, 44 percent, and 5 percent respectively. None mirrored the severe losses experienced in 2014 or 2022.
The critical difference in 2014 and 2022 was the income statement's inability to keep pace with spending. Operating profit nearly vanished in 2014 as investments escalated. In 2022, operating income halved while the Rivian write-down pushed net results into negative territory. When earnings continued to grow through a build-out, investors maintained confidence.
Amazon's trailing 12-month purchases of property and equipment, net of proceeds, currently stand at $169 billion, representing a $66.1 billion increase from a year earlier. The company attributes this rise primarily to artificial intelligence investments.
Historically, Amazon first reported full-year profit in 2003, with profitability fluctuating as the company consistently reinvested earnings into growth. After a period of large profits culminating in 2021, Amazon recorded a net loss in 2022, then returned to substantial profitability from 2023 through 2026, largely driven by high-margin segments like AWS.
