Amazon stock drops 18%, market value falls $450b

Amazon’s stock is approaching a 10th consecutive day of losses, which would tie its longest losing streak on record from 1997, with shares down about 18% since February 2, erasing roughly US$450 billion in market value.

The decline follows the company’s recent earnings report, where Amazon announced plans to spend US$200 billion this year on capital expenditures, primarily for artificial intelligence initiatives.

This figure represents a nearly 60% rise from last year and exceeds Wall Street forecasts by over US$50 billion, with investments expected to cover data centers, chips, and networking equipment.

Investors remain cautious about the company’s AI-related spending and its impact on free cash flow, with other tech giants like Alphabet, Microsoft, and Meta also increasing their infrastructure investments.

Amazon’s CEO, Andy Jassy, defended the spending, saying it will generate strong returns, while Wedbush analysts noted the company is in “prove it mode” to demonstrate the value of its capex.

🔗 Source: CNBC

🧠 Food for thought

Implications, context, and why it matters.

The spending plan signals an AI race plus AWS capacity needs

The investment targets growth. It also answers internal worries. The Financial Times wrote, and PYMNTS relayed, that Amazon Web Services (AWS) moved slower than rivals to lock in large AI-provider contracts after ChatGPT launched 1. AWS is the company’s cloud computing division.
Amazon plans the spending for 2026, not 2025. It would double the $100 billion in capital expenditures Amazon forecast for 2025 2.
The budget also covers AI chips plus supporting gear. On an earnings call, CEO Andy Jassy said the capex will pay for AI and chips. It will also fund robotics plus low-earth-orbit satellites. He said AWS is the main priority 3.
Some money is expected to support Project Kuiper, Amazon’s satellite internet effort. Jassy said it aims for a commercial launch in 2026. The service will connect directly to AWS 3.

The AI arms race is tightening infrastructure supply and shifting cloud competition

Amazon’s plan sits within a wider buildout. One report puts combined capital expenditures by Amazon and Alphabet at part of a total that also includes Microsoft plus Meta. The figure could reach $700 billion 4.
Such spending raises the cost of entry. It pushes more cloud market power toward a small group of hyperscalers, the largest cloud providers, that can bankroll the expansion.
Demand is already squeezing supply. Jassy said cloud providers, including Amazon, could grow faster with more capacity 5.
AWS is still the world’s largest cloud provider. PYMNTS, citing the Financial Times, says analysts expect AI-powered cloud services could help Microsoft’s cloud unit pass AWS within three years 1.