Amazon stock crashes after $200 billion AI spending shocks investors – Why AMZN, MSFT, NVDA, META, GOOG and ORCL shed $1 trillion amid tech bubble fears

Amazon AMZN stock price crash: Amazon stock took a sharp hit on Friday, with shares sinking more than 8% as investors reacted to the company’s latest capital spending plans and growing concerns that the artificial intelligence boom may be turning into a bubble.

Amazon stock (AMZN) plunges after capex forecast shocks investors

The sell-off followed Amazon’s fourth-quarter earnings report, in which the company said capital expenditures could reach $200 billion in 2026. That figure was more than $50 billion above analysts’ expectations and caught markets off guard at a time when investors are already uneasy about how much Big Tech is spending on AI, as per a CNBC report.

How Amazon’s spending compares with Big Tech rivals

Amazon’s warning comes as several major tech companies continue to ramp up investment. Alphabet, Microsoft and Meta have all signaled that their heavy spending will continue. In the fourth quarter alone, Amazon, Alphabet, Microsoft and Meta spent around $120 billion on capital expenditures and that total could rise above $660 billion this year, as per the CNBC report.


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Wall Street reacts unevenly to Big Tech capex plans

Despite the scale of spending across the sector, Wall Street’s reaction has been uneven. Investors have largely welcomed the spending outlooks from Meta and Alphabet, while Amazon and Microsoft have seen their shares come under pressure.

Over the past week, Amazon, Microsoft, Nvidia, Meta, Google and Oracle have collectively lost about $1.35 trillion in market value, according to FactSet data.

AMZN stock crash reason: Why Amazon’s $200 billion spending plan rattled markets

Amazon’s stock decline reflects broader fears around the AI build-out. Paul Markham, investment director at GAM Investments, told CNBC that companies tied to AI hardware and infrastructure are likely to see continued volatility as investor sentiment shifts. Paul said, “Questions over the extent of capex as a result of LLM build-outs, the eventual return on that, and the fear of eventual over-expansion of capacity will be persistent,” as quoted by CNBC.

While Amazon’s management has expressed confidence in the long-term returns from its investments, analysts say the lack of clarity is weighing on the stock. Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, said that, “We have suddenly gone from the fear that you cannot be last, to investors questioning every single angle in this AI race," as quoted by CNBC.

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AMZN stock price prediction: Monness cuts Amazon stock price target but keeps Buy rating

Meanwhile, analysts at Monness, Crespi, Hardt lowered AMZN stock price target on Amazon to $280 from $300 but maintained a Buy rating, as per an Investing.com report. The firm highlighted Amazon’s confidence in AWS, which delivered its highest year-over-year growth rate since the third quarter of 2022, and its optimism around artificial intelligence opportunities.

AWS growth offers a bright spot for Amazon investors

Amazon is also preparing to ramp up key projects with Anthropic and OpenAI in 2026, adding another layer of AI-related activity for its enterprise customers. While the planned $200 billion in capital spending represents a 52% year-over-year increase, Monness noted that the growth rate is still lower than what competitors Alphabet and Meta are planning.

FAQs

What worried investors about Amazon’s earnings report?

The scale of future AI-related spending and limited clarity on when returns might materialize.



Is Amazon alone in increasing AI spending?

No. Alphabet, Microsoft and Meta have also signaled continued heavy investment.