Amazon's shares fall after announcing surge in capital spending but posts strong 4Q holiday sales
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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.

Amazon reported fourth-quarter earnings slightly below Wall Street estimates even as sales surged and it reported the fastest growth in its prominent cloud computing business in 13 quarters.

The Seattle-based online behemoth on Thursday 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 14% 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 its cloud service arm called Amazon Web Services increased 24% to $35.6 billion. Analysts were expecting $34.9 billion.

Amazon said it plans to increase capital spending to $200 billion this year from $125 billion as it sees opportunities in artificial intelligence, robots, semiconductors and satellites, Amazon CEO Andy Jassy said in a press release. Wall Street analysts were expecting spending to rise to around $147 billion, according to FactSet.