Amazon shares tumble as $200B AI spending spree rattles investors

Amazon on Thursday projected a surge of more than 50% in capital expenditures this year, joining its peers in a spending spree to build out artificial-intelligence infrastructure, and sending its shares down 9% in after-hours trading.It is the latest sign that Big Tech will not be hitting the brakes any time soon on hefty AI investments. Amazon shares closed down 4.4% during regular trading as worries deepened about the enormous cost of the artificial-intelligence boom.The top four hyperscalers – Amazon, Microsoft, Alphabet’s Google and Meta – are expected to collectively spend more than $630 billion this year.Amazon also forecast a first-quarter profit range whose lower end would miss analysts’ expectations by a quarter, baking in roughly $1 billion in higher costs related to its high-speed internet business Leo, as well as investment in quick commerce and sharper prices in its international stores business.The company said it expects to invest about $200 billion in capital expenditures across Amazon in 2026, compared with about $131 billion in 2025. Amazon’s forecast for first-quarter operating income of $16.5 billion to $21.5 billion disappointed, falling below analysts’ estimate of $22.04 billion.Tech earnings over the past few days have shown Wall Street has a clear message for tech firms: Soaring AI spending can continue only if companies show commensurate operational or financial returns.“We wanted to see more of a consecutive cadence of strong earnings growth and that’s just not happening here,” said Dave Wagner, portfolio manager at Aptus Capital Advisors, referring to Amazon’s results.“The market just dislikes the substantial amount of money that keeps getting put into capex for these growth rates.”Google’s eye-popping capex forecast of $175 billion to $185 billion for the year got a pass from investors on Wednesday as the company delivered stellar growth in its cloud revenue, as did Meta’s plan to spend between $1...