NEW YORK, March 27, 2026, 18:10 (EDT)
Amazon.com Inc. shares slid 3.9% to $199.34 by late Friday, ranking among the S&P 500’s biggest drags as traders pulled back from megacap tech and consumer-discretionary names—those tied to non-essential spending—in a move away from risk. Amazon dropped 4% during the session, according to Reuters, contributing to consumer discretionary finishing as the day’s weakest major sector.
This is coming to a head now, with Amazon right in the crosshairs of the AI investment frenzy and the flight from risk triggered by the war, which is dragging on U.S. stocks. On Thursday, Reuters reported the Nasdaq officially entered correction territory—a Wall Street benchmark for a drop of at least 10% from its recent high. “An erosion in market enthusiasm” is how Interactive Brokers strategist Steve Sosnick put it, pointing to the shift since fighting began. Reuters
Amazon is under a brighter spotlight as investors work through the cost details. Back in February, the company projected capital spending of roughly $200 billion for 2026, up from $131 billion in 2025. Meanwhile, Amazon’s own Q4 report showed free cash flow dropping to $11.2 billion, the result of increased spending on property and equipment, a trend it linked directly to artificial intelligence investments.
The overhang remains. “The market just dislikes” the ongoing capital spending relative to growth, Aptus Capital Advisors portfolio manager Dave Wagner told Reuters. That money keeps flowing in, he said. Reuters
But Andy Jassy isn’t backing down. In fact, AWS pulled in $35.6 billion in revenue for the December quarter, a 24% gain, while Google Cloud surged 48% and Microsoft Azure posted 39% growth. Reuters said last week that Jassy’s forecast for AWS has ballooned — he now expects AI to push annual sales up to $600 billion by 2036, which is “at least double” what he’d told insiders before. Reuters
Selling hit a wide swath on Friday. Microsoft slipped 2.5%, while Alphabet lost 2.4%—pressure was visible among the heavyweight cloud and AI stocks.
But the risks are clear enough. Earlier this week, Amazon disclosed a disruption at its AWS Bahrain region tied to the ongoing Middle East conflict—the second time this month AWS has taken a war-related blow. Just like that, a headline shifts from markets to operations.
Funding remains a key concern. Amazon’s massive, nearly $54 billion multi-currency bond issue earlier this month caught attention. JPMorgan’s John Servidea flagged that the biggest cloud players still have substantial capital to raise as they expand their data center footprint. BofA, meanwhile, pushed its 2026 debt estimate for these firms up to $175 billion.
Right now, traders are looking for concrete signs that higher spending will actually deliver stronger profit growth. “The market’s overall tone has turned very negative,” said Ken Polcari of SlateStone Wealth. Unless sentiment improves, Amazon could stay lumped in with other major AI-focused tech names, rather than seeing its retail and ad businesses drive its shares. Reuters
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