NEW YORK, Feb 6, 2026, 15:03 (EST)
- Dow jumped past 50,000 for a moment, lifted by a rally in chip stocks and renewed buying in AI hardware names.
- Amazon shares dropped after the company pointed to a significant rise in 2026 capital expenditures, driven by investments in AI infrastructure.
- The multi-hundred-billion-dollar AI push by Big Tech is stirring up renewed questions about returns—and added pressure on software.
Wall Street surged Friday, pushing the Dow past 50,000 for the first time as chipmakers soared on hopes for fresh AI data-center investments, though Amazon slipped amid concerns over increased spending. The S&P 500 climbed 1.73%, with the Nasdaq Composite up 1.91%. Nvidia, AMD, and Broadcom all rallied over 7%. “Real demand for AI products” is still drawing in buyers, said Ross Mayfield, investment strategy analyst at Baird. 1
This shift is turning heads as the once-unified AI trade splits: hardware and infrastructure suppliers—those “picks and shovels” plays—are getting the market’s vote, but software firms and heavy spenders face more scrutiny. With Big Tech poised to pour about $600 billion into AI by 2026, investors have stopped handing out easy wins; now, every dollar committed is seen as a test of margins. “A de-risking trade,” SanJac Alpha’s Andrew Wells called it. Over at St. James’s Place, strategist Carlota Estragues Lopez pointed out that headlines get “interpreted far more cautiously” than before. 2
Amazon finally slapped a number on it: $200 billion in capital spending for 2026. That covers hardware and data centers. Shares dropped. MoffettNathanson called the figure “materially greater than consensus expected,” while AJ Bell’s Russ Mould flagged that investors are starting to shun names where “it is easier to disappoint than many may think.” CEO Andy Jassy defended the ramp-up, pointing to AWS’s heft—“AWS is a much larger business”—but AWS’s 24% growth still lagged Google Cloud’s 48% and Microsoft Azure’s 39%. 3
The bounce came after a bruising Thursday that pushed the Nasdaq to its weakest finish since November. Alphabet rattled nerves by flagging up to $185 billion in AI capex for the year, and investors pressed for clarity on when that might pay off. “We’re seeing this volatility about whether this investment will translate,” said Tom Hainlin, investment strategist at U.S. Bank Wealth Management. For SimCorp’s Melissa Brown, the AI trade that fueled last year’s rally “is perhaps the extinguisher this year,” with markets pulling apart the winners and the casualties. 4
Friday’s trading put a spotlight on the fierce rivalry among Big Tech heavyweights. Amazon, Microsoft, and Alphabet hold sway over cloud computing, and their investment moves increasingly dictate where the entire sector heads—whether you’re looking at chipmakers fueling AI data centers or software providers scrambling to show they can hold their pricing ground.
Plenty of investors want to boil this down, but it’s not so simple. Sure, if the build-out keeps humming along, demand for AI chips and data-center hardware seems clear-cut. The catch: those same AI systems might eat into segments of the software market, making “growth” suddenly all about tighter margins.
This earnings season, “capex” has become something of a lightning rod. Companies shelling out now may see bigger revenues down the road, but that comes at the expense of today’s free cash flow — and investors get restless fast if growth falters or projects fall short.
The risk isn’t hard to spot. Should AI demand lag behind the ramp-up in spending, talk could quickly shift from “infrastructure” to “overbuild”—a word that’s already cropping up, echoing the dot-com boom and bust.
