Amazon (AMZN) topped third quarter earnings estimates on both revenue and profit. One key metric investors were closely watching is the company's capital expenditures, particularly those related to AI investments.

Citizens JMP Equity Research Analyst Nick Jones breaks down the significance of Amazon's massive tech spending on Morning Brief.

Jones emphasizes that Amazon's AI investments are critical to maintaining its competitive edge. "AI is this massive, massive opportunity. We're only a year or so into the opportunity, so we're probably looking at a very long runway of spend," he tells Yahoo Finance.

The company plans to invest $75 billion in capital expenditures for 2024, and in 2025 "they'll likely spend more." Despite these substantial investments, Jones notes Amazon maintains strong operating income margins, which he sees as a key stock performance indicator.

"Amazon's a dominant cloud player. They're going to want to be dominant in AI. They need to keep spending," Jones adds, highlighting what he sees as a "multi-decade runway" for the company's artificial intelligence strategy.

To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.

This post was written by Angel Smith