Fears of excessive AI and data center spending send Amazon's shares plunging.

Amazon’s share price has tumbled in recent weeks, marking one of the most challenging stretches for the e-commerce and cloud-computing giant in nearly two decades. A combination of massive capital expenditure plans, investor unease about profitability, and broader tech sector weakness has pushed the stock into an extended downturn that has erased hundreds of billions in market value and raised questions about how Wall Street views Amazon’s long-term strategy.

By mid-February 2026, Amazon’s stock had fallen for nine consecutive trading sessions, its longest losing streak since 2006. Over this period, shares dropped roughly 18%, wiping out nearly half a trillion dollars in market value and pushing the stock toward levels not seen in months. The decline reflects growing investor concern that aggressive spending plans could weigh on short-term returns even if they support long-term growth.

At the core of investor anxiety is Amazon’s decision to dramatically increase capital expenditures in 2026, with spending expected to approach $200 billion. A large portion of this investment is directed toward artificial intelligence infrastructure, data centers, custom chips, robotics, and logistics systems — especially those supporting Amazon Web Services (AWS), the company’s powerful cloud division.

While AWS continues to generate strong revenue growth and remains highly profitable, investors worry that such enormous investments could pressure free cash flow and earnings if revenue gains do not materialize quickly enough. Building AI infrastructure requires heavy upfront spending, and markets are currently cautious about companies committing massive resources without clear timelines for returns.

Analysts note that Amazon has successfully navigated similar investment cycles in the past, including its early bets on AWS and Prime logistics infrastructure. Those investments eventually delivered strong competitive advantages, but returns took years to emerge. Today’s AI investment cycle could follow a similar pattern, but investors appear less willing to wait amid a more uncertain economic backdrop.

Amazon’s stock decline is also part of a broader sell-off affecting large technology companies. Several mega-cap tech stocks have weakened as investors reassess valuations and question whether heavy AI spending will quickly translate into profits. Companies leading the AI race are investing aggressively, but markets are now focused on when these investments will produce measurable financial gains.

Amazon and some of its tech peers have entered bear-market territory, trading more than 20% below recent highs. Market observers describe the shift as a valuation reset rather than a collapse in business fundamentals. Investors are increasingly demanding evidence that rapid spending growth will lead to sustained earnings expansion.

Amazon’s most recent quarterly earnings report did little to calm concerns. Revenue grew at a healthy pace year over year, driven by strong performance in AWS and advertising. However, earnings per share came in slightly below expectations, and management offered cautious guidance for future operating income.

The combination of slightly softer profitability and massive upcoming investments created uncertainty about near-term financial performance. Margins have shown some pressure as Amazon continues investing heavily in new capabilities, making the stock particularly sensitive to profit outlook changes.

Despite recent weakness, some analysts argue the market reaction may be overly pessimistic. Long-term investors note that Amazon has repeatedly invested ahead of demand to build dominant market positions. Its growing role in cloud computing, logistics, advertising, and AI infrastructure could create new growth engines over time.

Amazon is also investing in proprietary AI technologies, advanced cloud services, and next-generation data center infrastructure, all of which could strengthen its competitive advantage as AI adoption expands globally. Supporters of the company’s strategy believe current spending is positioning Amazon for the next wave of technological transformation.

However, the recent stock slide underscores the tension between Amazon’s long-term ambitions and investors’ desire for near-term profitability. For now, markets appear focused on cash flow and margins rather than distant growth potential.

Looking ahead, several factors will determine how Amazon’s stock performs in the coming months. Investors will closely monitor free cash flow trends, AWS growth and margins, and whether AI-related investments begin generating meaningful new revenue streams. Clear evidence that spending is translating into returns could help stabilize sentiment.

Until then, Amazon faces the challenge of convincing investors that today’s heavy investment cycle will produce tomorrow’s profits. How successfully the company balances long-term innovation with short-term financial discipline will likely shape both its stock performance and broader tech market sentiment in 2026.