NEW YORK, Feb 9, 2026, 10:51 EST
Amazon shares slipped roughly 1% early Monday after Bank of America trimmed its price target, with investors still wrestling with Amazon’s heavier spending outlook. Analyst Justin Post maintained his buy rating but dropped the target to $275 from $286, saying the AI push is industrywide, not just Amazon’s challenge. “Amazon is not alone in this investment, and we think it makes sense,” Post wrote. 1
The cash-flow angle is now taking center stage. Amazon plans to pour roughly $200 billion into capital expenditures in 2026—think data centers, equipment, long-term assets. That’s against the backdrop of its trailing 12-month free cash flow, which slid to $11.2 billion. CEO Andy Jassy spelled it out in the Feb. 5 earnings release: “We expect to invest about $200 billion in capital expenditures across Amazon in 2026.” 2
This is why the issue is hitting the market now: the AI push is dragging balance sheets back into focus. JPMorgan analysts, quoted by TipRanks, figure Big Tech’s AI spending spree could reach $660 billion this year—outpacing cash flow and leading tech and media names to issue at least $337 billion in investment-grade bonds. Amazon, for one, has highlighted the gap between its planned outlays and operational cash, signaling it might tap debt or equity markets. 3
Analysts aren’t dropping their bullish stance on Amazon, but price targets are all over the place right now. According to a TipRanks survey from Feb. 7, there’s still a Strong Buy consensus, the average 12-month target coming in at $283.49, even after shares tumbled 13.4% this past week. UBS’s Stephen Ju kept his buy rating and maintained a $301 target. Evercore ISI’s Mark Mahaney, meanwhile, lowered his target to $285 from $335 and described the quarter as “Beat & Mixed,” flagging 2026 as a possible negative free-cash-flow year. Piper Sandler’s Thomas Champion also pulled his target down, to $260 from $300, and said Amazon’s capex forecast “spooked” the market. 4
On Jan. 28, Jason Helfstein at Oppenheimer bumped his Amazon price target to $315 from $305, sticking with his Outperform call. Helfstein’s team is feeling more upbeat about AWS, Amazon’s cloud arm, according to the note. They’re penciling in 24% revenue growth for AWS in fiscal 2026, ahead of the 21% consensus he cited. He also flagged possible automation-driven cost savings. 5
Amazon’s $200 billion spending plan hasn’t just spooked its own investors. A Reuters piece from Feb. 6 noted the stock dropped 9% last Friday after the disclosure, and echoes of the dot-com era’s wild infrastructure bets came roaring back. “While the rising capital intensity is not a surprise directionally, the magnitude of the spend is materially greater than consensus expected,” analysts at MoffettNathanson wrote. 6
The risk is straightforward enough: high spending threatens to squeeze profits and puts ongoing strain on free cash flow if demand doesn’t pick up as quickly as expected. Bank of America, as cited by TheStreet, pointed to hurdles including stiffer competition, AWS customers still looking to trim their cloud budgets, and regulatory scrutiny on Amazon’s third-party marketplace. The bank also flagged execution risk tied to Amazon’s AI chip push—especially since major clients like Anthropic and OpenAI are still running in the red. 7
Investors want to see whether that added capacity actually drives lasting revenue, instead of just pushing up costs. With Amazon, the focus is on AWS’s growth pace, how retail keeps margins in check, and whether the heavy AI investments are showing up in customer deals—not just swelling depreciation expenses.
