Amazon shares rose over 1 per cent on Tuesday, halting a brutal nine-day decline that erased more than $450 billion from its market capitalisation.
The stock plunged nearly 18 per cent from 2 February to the prior Friday—the worst run since 2006—amid investor doubts over its artificial intelligence outlays.
The rout followed the firm’s fourth-quarter earnings this month, forecasting $200 billion in capital spending this year. That’s a 60 per cent surge from 2025, exceeding estimates by over $50 billion, mainly for AI infrastructure like data centres and chips.
Tech titans’ AI splurges have spooked markets, threatening free cash flows. Amazon, Alphabet, Microsoft, and Meta could hit $700 billion combined this year.
Peers slid too: Alphabet and Microsoft down over 1 per cent, Meta less than 1 per cent, with the former pair on five straight loss days.
AWS CEO Matt Garman said on CNBC last week that the boost will seize cloud AI chances.
Wedbush analysts called it “prove it mode.”
“The increase in spending will remain an overhang as investors digest the guide and will likely need to see more tangible returns before regaining comfort,” they wrote.
Citizens analyst Andrew Boone stayed upbeat on AWS. “Amazon CEO Andy Jassy’s data centre doubling by 2027 will spur growth,” he told CNBC.
“We think that’s going to lead to an acceleration in terms of AWS revenue as more capacity comes online,” Boone said on “The Exchange.”