New York, Feb 7, 2026, 06:27 ET — Market closed.
- Amazon closed out Friday at $210.32, slipping 5.55%.
- Shares slid after renewed worries surfaced about the $200 billion capital spending plan set for 2026, plus more immediate pressure on profits.
- Analysts trimmed price targets, and one firm moved to a downgrade, citing intensifying competition in the cloud sector.
Amazon.com stock slid 5.55% to finish at $210.32 on Friday, wrapping up a choppy session as the market digested the tech giant’s updated spending and profit guidance.
This shift packs a punch for a market already skittish about AI’s mounting costs. U.S. tech heavyweights are preparing to pour upwards of $630 billion into the hardware behind the boom—data centers, plus the chips powering them. The sheer scale dredges up memories of the early 2000s dot-com buildout.
Amazon stands out as a straightforward example here: the company is ramping up capital expenditures—think data centers, equipment, the works—and wants investors to focus past short-term fluctuations. For the first quarter, Amazon put its operating income outlook somewhere between $16.5 billion and $21.5 billion. LSEG data had analysts looking for $22.04 billion. “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. Reuters
Amazon’s quarterly results showed net sales hit $213.4 billion, with net income per diluted share landing at $1.95. Revenue from Amazon Web Services reached roughly $35.6 billion, and advertising services brought in about $21.3 billion. Chief Executive Andy Jassy called out the 24% growth at AWS, saying it marked “our fastest growth in 13 quarters” in the company’s release. SEC
Another layer of pressure landed as D.A. Davidson downgraded Amazon to Neutral from Buy, slashing its price target to $175. Analyst Gil Luria said AWS is “losing the lead,” with Amazon “now scrambling to catch up through escalating investment,” according to the firm’s note. Investing.com
Some banks dialed back their price targets yet held onto their optimistic outlooks after the earnings. According to Investopedia, analysts across multiple firms reiterated bullish ratings but trimmed targets. Wedbush flagged that investors “will likely need to see more tangible returns,” while Morgan Stanley labeled Amazon “the most under-appreciated GenAI winner” — that’s generative AI — among its peers. Investopedia
Bulls face a clear risk here. A larger capex cycle has the potential to pinch free cash flow, so even minor execution slip-ups could carry a bigger price—particularly if cloud growth loses steam or price competition heats up.
There’s also the question of how much patience investors have left for the sector. Big Tech insists the spending is warranted by demand, but the tape’s been volatile—expectations have reset fast on little news.
Looking to the week, traders are eyeing the stock to see if its earnings and capex hangover triggers more estimate cuts. Some, though, are waiting to see if sharp repricing draws in bargain-hunters.
