Amazon Faces Stock Decline Amid Disappointing Q1 Outlook, AI Investments

Amazon reported strong fourth-quarter earnings with revenue of $187.79 billion, exceeding analyst expectations, but projected disappointing first-quarter guidance, resulting in a 4% drop in after-hours trading. The company highlighted foreign exchange impacts and lower-than-expected growth in its AWS division, which saw a 19% increase but lagged behind competitors like Microsoft and Google. Despite the robust performance, analysts expressed concerns about Amazon's high capital expenditures, amounting to $75 billion for AI initiatives in 2024, amid scrutiny of Big Tech's investments in artificial intelligence. CEO Andy Jassy is focused on transforming Amazon into an AI powerhouse while implementing cost-cutting measures across the company. Shares have risen significantly over the past year, yet the recent forecast has led to skepticism about future growth. Overall, the mixed results highlight the ongoing challenges and opportunities within the rapidly evolving AI landscape.