New York, Feb 7, 2026, 12:43 (EST) — The market is closed.
Investors can’t agree on whether the AI surge is worth the price tag as Big Tech heads into next week. Amazon.com (AMZN.O) slid 5.6% on Friday, while Nvidia (NVDA.O) soared 7.9%. Thanks to Amazon’s latest moves, expected AI spending by it and cloud giants Microsoft, Alphabet, and Meta is now pegged close to $600 billion for 2026. The Dow broke through 50,000 for the first time ever on Friday. Yet the Nasdaq lags, down 0.9% so far this year. 1
Amazon is staring down a capex tab that’s ballooning fast: the company expects to spend $200 billion in 2026, a sharp jump from $131 billion next year. Shares dropped 11.5% in after-hours trading Thursday. CEO Andy Jassy pointed out AWS now has a $142 billion annualized run rate, and the cloud division notched 24% growth to $35.6 billion. 2
Wall Street’s focus has shifted to margins—when will all this spending pay off, not just build out capacity? Alphabet (GOOGL.O) is lining up as much as $185 billion in capital spending for 2026. Microsoft (MSFT.O) tumbled 5% as the Nasdaq slid 1.59% Thursday, marking its lowest close since November. “We’re seeing this volatility about whether this investment will translate,” said Tom Hainlin, strategist at U.S. Bank Wealth Management. 3
Software names have taken the brunt of it. The S&P 500 software and services index slid 4.6% Thursday, erasing roughly $1 trillion in market value since Jan. 28 as investors got spooked by the speed of new AI tools threatening the industry. “A sell-everything mindset,” is what Dave Harrison Smith, the tech investing lead at Bailard, called the mood. 4
Scale, not direction, drove the market move, according to some analysts. MoffettNathanson flagged the “magnitude of the spend is materially greater than consensus expected” and cautioned that the surge is dragging up dot-com-era echoes. 5
Money keeps flowing to the “picks and shovels” — the hardware behind the data-center boom — but some corners of software aren’t catching a bid. Reuters analysis points to a global AI trade that’s splintering, with capex on the rise, debt mounting, and investors fighting over who stands to win from the tech. 6
Amazon, Apple, Alphabet, Meta, Microsoft and Nvidia aren’t marching in lockstep anymore. Barclays equity strategists point out the group’s correlation has dropped to the lowest level in at least ten years. “Never seen sentiment this negative” in software stocks, wrote Michael Toomey, managing director for equities trading at Jefferies. 7
Chip stocks surged Friday, flipping higher after Nvidia CEO Jensen Huang called AI chip demand “going through the roof.” AMD and Broadcom shares followed suit, moving up alongside Nvidia, according to Investopedia. 8
Big Tech faces the chance that this capex surge starts cutting the other way. Depreciation climbs, power costs tick up, payback stretches out—free cash flow gets pinched, and investors are showing less tolerance for delays. A fresh spike in bond yields could land another blow on long-duration growth names.
Markets are closed for now, but traders have their sights set on the next big events: the U.S. January jobs data hits Wednesday, Feb. 11, with January CPI inflation numbers following Friday, Feb. 13. Both land at 8:30 a.m. ET. 9
The real spotlight for AI demand lands later this month, when Nvidia steps up with its earnings report and call on Feb. 25—a date that’s circled by those tracking how AI spending translates into tangible orders. 10
