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Amazon (AMZN) shares plunged 8% in premarket trading on Friday, February 6, 2026, following the company’s fourth-quarter earnings report that revealed aggressive capital expenditure plans totaling $200 billion for 2026. The sharp decline reflects mounting investor anxiety over Big Tech’s massive spending spree on artificial intelligence infrastructure, with total industry AI spending estimated to exceed $600 billion this year.

Despite reporting solid fourth-quarter results with revenue rising to $213.4 billion and net profit of $21.2 billion in line with analyst expectations, the market’s focus shifted to concerns about immediate returns on these substantial capital outlays and the potential for AI tools to disrupt traditional software demand.
 

Massive AI Investment Plans Trigger Selloff

Amazon’s announcement of $200 billion in capital expenditures for 2026 represents a significant escalation in AI-related spending that caught investors off guard. MoffettNathanson analysts noted that “while the rising capital intensity is not a surprise directionally, the magnitude of the spend is materially greater than consensus expected.”

This spending spree is part of a broader trend across Big Tech, with Alphabet indicating its capex could double from a year ago, while Meta and Microsoft have also ramped up their investment plans. The collective industry spending of over $600 billion has raised fundamental questions about the prospects of immediate returns from these enormous capital outlays.

The market reaction was swift and severe, with Amazon CEO Andy Jassy striking a notably defensive tone during the post-earnings investor call. Jassy emphasized that AWS grew 24% year-over-year to reach a $142 billion annualized run rate, attempting to differentiate Amazon’s position from competitors with smaller bases but higher percentage growth.

At least five brokerages reduced their price targets on Amazon stock following the results, reflecting the diminished confidence in the near-term outlook. The selloff extended beyond Amazon, contributing to a broader tech sector decline as investors grappled with fears that rapidly improving AI tools could erode demand for traditional software and squeeze profit margins.
 

Amazon Shares Slide as Capex Overshadows Q4 Results

As of 6:10 AM EST on Friday, February 6, 2026, Amazon shares traded at $205.21 in premarket activity, down $17.48 or 7.85% from the previous close of $222.69. This represented a further decline from the regular session close of $232.99, bringing the total premarket loss to approximately 8%. The stock had already fallen 4.42% during regular trading hours on Thursday following the earnings announcement.

Amazon’s market capitalization stood at $2.381 trillion, with the stock trading at a price-to-earnings ratio of 31.45, higher than Microsoft’s 21.62 but slightly below Alphabet’s 28.36.

Amazon’s fourth-quarter performance showed strong operational results, with AWS revenue growing 24% to $35.6 billion, though this trailed the growth rates of competitors Google Cloud (48% to $17.75 billion) and Microsoft Azure (39%). The company’s online stores business generated $82.9 billion in revenue, up from $75.6 billion year-over-year.

However, these positive fundamentals were overshadowed by the capital spending announcement and broader concerns about AI investment returns. Analysts expressed caution that while Amazon likely has “appropriate demand signals” to justify the $200 billion expenditure, “the margin of error is shrinking” as the company navigates this period of unprecedented capital intensity.

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