Amazon's $200B AI Capex Under Scrutiny as Texas Data Center Spending Drives 9% Power Surge
AMZN•Amazon's $200 billion AI capex faces Wall Street scrutiny after lagging the S&P 500's 27% gain since 2025, underperforming other Magnificent Seven peers. Amazon is spending billions on AI data centers in Texas, driving a 9% jump in state power demand over six months.
1. Underperformance Versus S&P 500
Since the start of 2025, Amazon's share price has lagged the S&P 500's 27% rise, joining Apple, Microsoft, Tesla and Meta in underperforming the index. Investors are questioning why Amazon's returns trail peers like Nvidia (49% gain) and Alphabet (88% gain) in the AI-driven rally.
2. Wall Street Scrutiny of AI Capex
Amazon's nearly $200 billion planned capital expenditure on AI hardware and software has drawn criticism from analysts demanding clearer ROI timelines. The scale of this investment, second only to Microsoft among Big Tech, raises margin concerns and puts pressure on near-term earnings.
3. Texas AI Data Centers and Power Demand
Amazon is investing billions to build AI data centers in Texas, contributing to a 9% surge in the state's electricity demand over the past six months. This spike strains the grid and could lead to higher utility costs or regulatory interventions affecting Amazon’s operating expenses.
