Amazon misses on earnings and holds capex steady, adding to AI spending jitters

Amazon's third-quarter earnings miss is likely to raise concerns among investors about the company's spending trajectory, particularly with regards to artificial intelligence (AI). Despite a steady capital expenditure (capex), the market may interpret this as a sign that Amazon is not pulling back on AI investments, which could weigh on profitability.

The e-commerce giant's capex has been a point of focus in recent quarters, as investors seek clarity on how the company is balancing growth initiatives with margin expansion. Amazon's decision to hold capex steady suggests that it remains committed to investing in areas such as cloud computing, advertising, and AI, which are seen as key drivers of long-term growth.

Going forward, brokers will be watching Amazon's fourth-quarter guidance and any updates on its AI spending plans. The company's ability to demonstrate a clear path to margin improvement and return on investment in AI will be crucial in reassuring investors and supporting the stock price. Additionally, investors may also be looking for insights into how Amazon's AI investments are translating into revenue growth and competitive advantages in its various business segments.

Originally reported by cnbc.com. BrokerNews adds analysis for finance & markets readers.