Amazon's stock price falls into a technical bear market, with concerns in the market over its aggressive capital expenditure plans

The Economic Observer reports that Amazon’s stock price has recently been declining continuously, mainly due to market concerns over its aggressive capital expenditure plans and the overall weak sentiment in the tech sector.

Recent Stock Performance

According to financial reports, Amazon announced a capital expenditure plan of up to $200 billion by 2026, a more than 50% increase from $131 billion in 2025, far exceeding Wall Street expectations. This massive spending is primarily directed toward AI infrastructure, in-house chip development, and low Earth orbit satellite projects. The market worries that high investments will squeeze short-term profits, leading to a significant reduction in free cash flow. Financial reports show that free cash flow over the past 12 months plummeted from $38.2 billion to $11.2 billion, a decrease of 70.7%. Additionally, the company’s profit guidance for Q1 2026 was below market expectations, further fueling investor concerns about short-term profitability pressures.

Industry Sector Situation

Recently, U.S. tech stocks have generally pulled back, with the Nasdaq index dropping over 2% at the beginning of February. Investors are concerned about the return cycle of massive investments in AI. Amazon, Microsoft, Meta, and Alphabet are expected to spend a combined total of over $630 billion on AI-related capital expenditures by 2026. Investors are reassessing the risks of high-valuation tech stocks, especially after performance guidance from chip companies like AMD fell short of expectations, further worsening sector sentiment.

Stock Price and Capital Flow Performance

Despite Amazon’s impressive performance in 2025, its stock price has not been supported. As of February 12, 2026, Amazon closed at $199.60, down 21.4% from recent highs, entering a technical bear market, with a year-to-date decline of 13.53%. Trading volume has increased, indicating growing divergence in capital flows; for example, on February 6, trading volume reached $36.9 billion, a 63.19% increase from the previous day.

Amazon’s stock price decline reflects market concerns over short-term profit and free cash flow pressures, compounded by the tech sector’s collective reflection on high AI spending. Although the company’s long-term AI infrastructure strategy is clear, investors are more focused on the uncertainty of capital expenditure returns.

The above content is compiled from publicly available information and does not constitute investment advice.