Amazon, a leader in e-commerce and cloud computing, has recently seen a staggering decline in market value, losing approximately $450 billion since February. This downward trend raises concerns as it could potentially lead to the company's longest streak of consecutive daily declines, matching a record set back in 1997 if the stock closes lower.
The erosion in valuation represents an 18% decrease since February 2nd. Key factors contributing to this downturn include investor unease surrounding Amazon’s substantial capital expenditures for the year, which are expected to reach $200 billion. This figure significantly exceeds Wall Street's expectations by over $50 billion and predominantly focuses on investments in artificial intelligence infrastructure such as data centers, semiconductors, and networking equipment.
A research firm specializing in technology, Wedbush Securities, notes that Amazon is currently in a phase of requiring validation from the market regarding these investments. Although they maintain an outperform rating, the firm warns that the high level of spending may dampen market sentiment until measurable returns are achieved.
Concerns about capital expenditure are not isolated to Amazon; major technology companies like Alphabet, Microsoft, and Meta have similarly faced stock price drops after announcing significant spending plans for 2026. While there may be a temporary bounce in stock prices, analysts suggest that further declines could be on the horizon as investors reassess the extent and timing of AI-related spending across the sector. Collectively, the anticipated capital expenditures of these four tech giants could reach an astonishing $700 billion this year, reflecting the growing focus on AI and related technologies.