Amazon.com Inc. projected profit for the current quarter that fell short of analysts’ estimates, suggesting the company continues to ramp up spending to support artificial intelligence services. Operating income is expected to be between $14 billion and $18 billion in the period ending in March, compared to the average analyst estimate of $18.2 billion. First-quarter sales are projected to be as much as $155.5 billion, compared to the average estimate of $158.6 billion.

Chief Executive Officer Andy Jassy has been cutting costs and focusing the company on three business pillars: e-commerce, cloud computing, and advertising. Determined to become a supermarket for artificial intelligence products and services, he’s plowing billions of dollars into data centers and homegrown chips capable of handling AI tasks and taking on market leader Nvidia Corp.

Amazon shares declined about 1% in extended trading after closing at $238.83 in New York. The stock has gained 8.9% so far this year after a 44% jump in 2024. While Amazon’s overall quarter was generally positive, “investors immediate concerns are around Q1 guidance, which was below expectations, mostly because of the impact of a big currency drag and the impact of lapping a leap year,” said Gil Luria, an analyst at DA Davidson & Co.

Amazon Web Services revenue jumped 19% to $28.8 billion in the quarter ended Dec. 31, in line with analysts’ estimates. It was the third straight quarter of 19% growth for the cloud unit. Operating income generated by the unit was $10.6 billion, exceeding the average projection of $10.1 billion.

Amazon purchases of property and equipment totaled about $83 billion in 2024, with much of that spending on the AI race. The company spent $27.8 billion on property and equipment in the fourth quarter, well above analysts’ expectations of $22.3 billion in such expenses. Quarterly revenue increased 10% to $187.8 billion. Operating profit was $21.2 billion, compared with the average estimate of $18.8 billion. Total operating expenses rose 6.2% to $166.6 billion — marking the eighth consecutive quarter that Amazon’s revenue increased at a higher rate than costs.