Amazon Shares Drop 12 Percent on Massive AI Spending Plan
The e-commerce and cloud computing giant saw its stock nosedive nearly 5% during regular trading hours before extending losses to 7% in after-hours trading—marking one of the sharpest single-session declines the company has experienced in recent months.
The market turbulence erupted after Amazon revealed on Thursday its intention to pour approximately $200 billion into AI-related capital expenditures throughout 2026, a staggering commitment that has sparked concern among shareholders about immediate profitability.
Market analysts suggest investor anxiety stems from fears that such substantial infrastructure investments in artificial intelligence will compress profit margins in the short term, despite potential long-term competitive advantages.
The ripple effects extended beyond Amazon, with the broader technology sector experiencing downward pressure as other leading companies face similar scrutiny over their own AI spending commitments.
The double-digit percentage decline represents a significant confidence crisis as markets weigh the costs of the AI arms race against uncertain returns on these massive capital deployments.
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