Key Stats for Amazon Stock
- YTD Price change for Amazon stock: -10%
- $AMZN Share Price as of Feb. 19: $205
- 52-Week High: $259
- $AMZN Stock Price Target: $281
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What Happened?
Amazon (AMZN) stock plunged 8% on 6th February, pushing the shares into a technical bear market after the company announced plans to spend $200 billion on capital expenditures in 2026.
That’s roughly $53 billion more than Wall Street was expecting.
The earnings themselves were actually solid. Amazon posted Q4 revenue of $213.4 billion, up 12% year over year and slightly ahead of estimates.
AWS revenue grew 24%, the fastest growth rate in 13 quarters, and advertising revenue climbed 22% to $21.3 billion. Earnings per share came in at $1.95, just a hair below the $1.97 consensus.
So why is Amazon stock getting crushed?
It all comes down to spending. CEO Andy Jassy made it clear the company is going all-in on AI infrastructure, saying the $200 billion in capex will go “predominantly” to AWS to meet surging demand for both AI and core cloud workloads.
“We’re monetizing capacity as fast as we can install it,” Jassy said on the earnings call.
The problem is that investors were bracing for about $146 billion in capex, according to FactSet estimates. Amazon already spent roughly $131 billion in 2025, so this represents another big step-up.
The company is essentially telling Wall Street it’s prioritizing growth and market share over near-term profitability, rattling investors who were hoping to see more free cash flow.
This also comes as Amazon laid out plans to cut about 16,000 corporate employees. The company had already cut 14,000 jobs last October.
So even as Amazon stock sells off amid heavy spending plans, it’s simultaneously downsizing its workforce to control costs elsewhere.
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What the Market Is Telling Us About Amazon Stock
Amazon stock isn’t alone in this selloff. The entire AI infrastructure trade is getting repriced as investors digest massive spending commitments from Big Tech.
Google’s parent, Alphabet, said it expects to spend up to $185 billion in 2026, while Meta projected capex could reach $135 billion.
The question investors are wrestling with is whether these investments will actually generate the returns management teams are promising.
For Amazon specifically, the selloff reflects concerns that AWS is having to spend aggressively just to keep pace with Microsoft and Google in the AI race.
Azure grew 39% last quarter, and Google Cloud grew 48%, both off smaller bases. Amazon is still the leader, but the spending required to maintain that lead is clearly climbing.
On the positive side, AWS is actually accelerating. The 24% growth rate in Q4 was the best in over three years, and management emphasized that demand is incredibly strong.
Amazon’s custom AI chips, Trainium and Graviton, are now generating over $10 billion in annual revenue and growing at triple-digit rates.
If the company can monetize this capacity as quickly as Jassy claims, the return on invested capital story could play out favorably.
For now, though, Amazon stock is paying the price for prioritizing long-term dominance over short-term cash flow.
Whether that bet pays off will depend on how quickly AI workloads ramp and whether Amazon can maintain its infrastructure lead without burning through shareholder returns in the process.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
