Amazon shares dove more than 8 percent on Thursday as the computing and retail titan reported strong sales but raised spending estimates.

Amazon reported a profit of US$21.2 billion on net sales of US$213.4 billion in the recently ended quarter as its AWS cloud computing, retail, advertising, and chips businesses thrived.

"With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low-earth orbit satellites, we expect to invest about US$200 billion in capital expenditures across Amazon in 2026," said Amazon chief executive Andy Jassy.

Market analysts had forecast that Amazon capital expenditures would reach about US$147 billion this year, mostly due to AI spending initiatives.

Amazon Web Services (AWS) unit sales in the quarter tallied US$35.6 billion, a 24 percent jump from the same period a year earlier, according to earnings figures.

Like other tech giants, Amazon is making massive investments to grab a slice of the AI revolution pie.

It is particularly banking on the performance of AWS, the world's leading cloud provider, which is engaged in a race against its fast-growing rivals, Microsoft Azure and Google Cloud.

Spending on developing new AI-based chips and services is growing exponentially. In December, Amazon announced that it would invest more than US$35 billion in India.

The earnings release comes on the heels of Alphabet and Microsoft reporting that they are seeing cloud computing demand surge and are continuing to invest heavily on infrastructure supporting the technology.

Both Alphabet and Microsoft shares have suffered despite robust quarterly earnings as investors focused on billions of dollars they are pumping into cloud computing and artificial intelligence.

The tech giants are all making huge investments to build up their AI computing capabilities, money that the companies insist will be justified by increasing adoption of AI tools and applications by customers across the globe.

Amazon announced last week that it would be cutting 16,000 jobs worldwide as part of a restructuring, as it focuses spending on artificial intelligence.

The job cuts, which follow already flagged plans to cut its workforce by 14,000 posts, are aimed at "reducing layers, increasing ownership, and removing bureaucracy," senior vice president Beth Galetti said in a statement.

An overall elimination of 30,000 jobs would amount to nearly 10 percent of the 350,000 office jobs at Amazon, where distribution and warehouse workers make up the bulk of its 1.5 million employees. (AFP)