Amazon surprised Wall Street with a forecast of $200 billion in capital expenditures by 2026. CEO Andy Jassy expects a strong return on invested capital. The company’s chips business is growing rapidly. Despite this, Amazon’s stock fell after the earnings report, down over 10% year to date. Investors should consider the long-term potential of Amazon’s investments.

Jassy highlighted the growing demand for AWS and the company’s ability to convert spending into profit. Amazon’s chip business, with an annual revenue run rate over $10 billion, is also thriving. Jassy believes competitors aren’t aggressive enough on pricing, presenting opportunities for Amazon. The company’s diversified and growing business has substantial long-term potential.

Amazon’s robust fourth-quarter results, with net sales up 14% year over year, support a bullish case for the stock. Operating income increased, even as capital expenditures rose. Management’s guidance for first-quarter revenue growth of 11% to 15% further boosts confidence. The market may have overreacted to the earnings report, potentially creating a buying opportunity for long-term investors.

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Read more at Nasdaq: Amazon Stock Investors Just Got Fantastic News From CEO Andy Jassy