Amazon raises capital spending to $220 billion as memory costs surge

Amazon has increased its planned capital spending to $220 billion for 2026 after a sharp rise in memory chip prices, highlighting the growing financial impact of the artificial intelligence boom on the technology sector. The higher investment forecast reflects mounting costs for memory components as demand for AI infrastructure continues to outpace supply.

Amazon Chief Executive Officer Andy Jassy announced during the company’s second-quarter earnings call that the revised capital expenditure plan represents a significant increase from the previous estimate of about $200 billion. He said the higher cost of memory chips was the main reason behind the adjustment.

The spending increase follows a strong quarter for Amazon Web Services. The cloud computing division reported revenue of $42.2 billion, up 37 percent from a year earlier, surpassing analyst expectations of roughly 31 percent growth. Strong demand for AI services has continued to drive investment across Amazon’s cloud infrastructure.

Apple also highlighted the pressure created by soaring memory prices during its earnings conference. In what was expected to be Tim Cook’s final earnings call as Apple’s chief executive, he described current conditions in the memory market as a “once-in-a-century flood” because of the scale of price increases.

Apple had already raised prices for some Mac and iPad models in June to offset higher memory costs. Looking ahead to September, Cook said the company expects memory expenses to rise further. He noted that the DRAM market is dominated by only three major suppliers, limiting flexibility for buyers. Apple plans to offset part of the increase through lower costs for selected non-memory components and by using existing inventory where possible.

The rise in memory prices is being driven by unprecedented demand from hyperscale cloud providers expanding AI infrastructure. The resulting pressure on DRAM and NAND supply has tightened the market and increased costs throughout the semiconductor industry.

Samsung warned that the global memory shortage could continue until 2028, suggesting that supply constraints may remain a defining feature of the AI investment cycle for years. Higher memory prices are forcing technology companies to expand capital budgets, while those larger investment plans reinforce expectations of sustained demand, placing additional pressure on available supply.

Investor sentiment toward semiconductor companies strengthened after the announcements. Shares of Micron Technology, SanDisk, Western Digital and the U.S.-listed shares of SK Hynix rose between 2 percent and 8 percent in after-hours trading, extending gains recorded during the regular session.

The sector also benefited from strong earnings reports from Microsoft and Lam Research. Microsoft’s confirmation that it will maintain heavy investment in AI infrastructure further reinforced expectations of continued demand for advanced memory and semiconductor technologies across the industry.