Amazon Shares Plunge After $200 Billion AI Spending Plan

Shares of Amazon.com Inc. fell as much as 11.5% following a February 5, 2026, earnings report detailing a massive increase in capital expenditures. The company plans to spend approximately $200 billion in 2026—a surge from roughly $130 billion in 2025—to expand its artificial intelligence infrastructure, semiconductor chips, robotics, and low-earth orbit satellites. This guidance significantly exceeded the analyst consensus of approximately $147 billion, sparking investor fears of a dot-com-style bubble and potential overcapacity.

Despite the stock volatility, Amazon reported record fourth-quarter net sales of $213.4 billion, a 14% increase. Amazon Web Services (AWS) saw its fastest growth in 13 quarters, with revenue rising 24% to $35.6 billion. However, the company slightly missed earnings expectations, reporting $1.95 per share against an anticipated $1.97, while free cash flow dropped from $38.2 billion to $11.2 billion year-over-year due to heavy AI investments.

To offset these costs, Amazon is implementing a major restructuring that includes cutting 30,000 total jobs, including 16,000 corporate positions. The company is also closing nearly all Amazon Go and Amazon Fresh stores to focus on Whole Foods and delivery services. CEO Andy Jassy defended the strategy, stating the company is monetizing AI capacity as quickly as it is installed and highlighting a $10 billion annual revenue run rate for its in-house chip business.

Market analysts remain divided. While firms like Jefferies warned that AWS growth lags behind rivals, others from Bank of America and Wedbush maintained positive ratings, viewing the spend as necessary to maintain cloud leadership.