NEW YORK, Feb 6, 2026, 04:50 ET — Premarket
- Amazon shares dropped 7.7% to $205.60 in premarket action following a steep decline after earnings. Investing.com
- The stock closed Thursday 4.4% lower, finishing at $222.69. StockAnalysis
- Amazon highlighted roughly $200 billion in capital expenditures for 2026, alongside a first-quarter operating income forecast between $16.5 billion and $21.5 billion. Amazon
Amazon.com shares slipped once more ahead of the U.S. open on Friday, last seen down 7.7% at $205.60 in premarket trading following a 9%-plus drop in after-hours action. Investing.com
This shift is significant since investors have been slashing large tech stocks over soaring AI expenses that are outpacing short-term profits. The selloff weighed on Wall Street Thursday, fueled by growing concern over AI spending and the timing of returns across the sector. Reuters
Amazon’s ripple effects extend beyond its own stock. Alphabet outlined a significant jump in capital expenditures for 2026 this week, fueling debate on whether demand for cloud and AI will match the scale of their infrastructure expansion. Reuters
Amazon plans to pour roughly $200 billion into capital expenditures in 2026, CEO Andy Jassy announced, citing “strong demand” in areas like AI, chips, robotics, and low earth orbit satellites. Capex refers to cash spent on long-term assets such as data centers, servers, and warehouses. Amazon
Amazon’s fourth-quarter net sales jumped to $213.4 billion, with Amazon Web Services revenue up 24% to $35.6 billion. The company projects March-quarter net sales between $173.5 billion and $178.5 billion. Operating income is expected to land from $16.5 billion to $21.5 billion, factoring in about $1 billion in higher year-over-year Amazon Leo expenses and investments in “quick commerce” and pricing adjustments in international markets. Amazon
Some investors are looking beyond the quarter, zeroing in on the length of the spending cycle. “The market just dislikes the substantial amount of money that keeps getting put into capex for these growth rates,” said Dave Wagner, portfolio manager at Aptus Capital Advisors. D.A. Davidson analyst Gil Luria added that Amazon “has to invest at these levels just to stay in the race.” Reuters
Some pointed to Amazon’s track record as a reason for patience. Morgan Stanley equity analyst Brian Nowak noted, “AWS is accelerating … and Retail is delivering with improving efficiency,” highlighting the company’s strong returns on invested capital. This, he said, keeps the firm bullish. Investing.com
Alphabet kicked off earnings week with a bold forecast, projecting 2026 capital expenditures between $175 billion and $185 billion after posting a 48% jump in Google Cloud revenue. That kind of rapid expansion highlights the aggressive build-out by major platforms. It also raises the stakes for Amazon, which now faces pressure to prove AWS can maintain both market share and margins while scaling up capacity. Reuters
The near-term debate is tangled: ramping up spending might speed growth down the line, but it squeezes free cash flow for now. Traders are keyed in on whether Amazon’s capex strategy will push harder compromises on pricing, delivery speed, and cloud margins.
A major risk is that demand for AI workloads dips or changes course, leaving firms stuck with excess capacity they can’t sell at profitable rates. If that scenario unfolds, investors might grow less tolerant of the “invest now, monetize later” approach rather than more.
The opening bell will reveal if dip-buyers jump back in or if selling drags the mega-cap stocks lower. Outside of tech, traders are gearing up for next week’s U.S. economic calendar, with the January 2026 Employment Situation report due Feb. 11 at 8:30 a.m. ET. bls.gov
