Amazon Plans $200B AI Capex as Shares Slide 18%, Erasing $450B
Amazon shares have fallen roughly 18% since February 2, erasing about $450 billion in market value and approaching a record 10-day losing streak last seen in 1997. The company plans $200 billion in 2026 capital expenditures—up nearly 60% year-over-year and $50 billion above forecasts—primarily to fund AI infrastructure, sparking free-cash-flow concerns.
1. Historic Stock Decline
Amazon shares have dropped about 18% since February 2, wiping out roughly $450 billion in market value. The stock is poised to record its 10th consecutive day of losses, potentially matching the company’s longest losing streak from 1997.
2. Escalating Capital Expenditure Plans
In its fourth-quarter report, Amazon announced plans to commit $200 billion to capital expenditures in 2026, representing a nearly 60% increase over last year and exceeding analyst forecasts by $50 billion. The majority of this spending will support data centers, chips and networking equipment for AI initiatives.
3. Investor Concerns and Management Response
Investors have expressed worries that the surge in AI-related infrastructure spending could erode free cash flow and weigh on profitability. CEO Andy Jassy defended the investment strategy on an analyst call, asserting confidence that the expenditures will generate strong returns on invested capital.