Amazon stock’s downward march continues. On Friday February 13, Amazon shares posted their longest streak of daily losses in almost 20 years. Shares fell 0.4% on Friday, their ninth straight negative session. This is the longest losing streak for the stock since another nine-day drop that ended in July 2006. The stock shed 18% over the latest stretch, erasing about $463 billion in market valuation. Shares closed at their lowest since May. As for this month so far, Amazon shares are down about 17%, on pace for their biggest monthly percentage drop since April 2022. What seems to be hurting Amazon’s stock most is the capital expenditure guidance that the company gave earlier this month. Much of Amazon’ stock drop can be traced to results earlier this month, after Amazon said that it would spend $200 billion this year on data centers, chips and other equipment. Amazon announced in its fourth-quarter earnings report that its capital expenditures are expected to reach $200 billion in 2026, which was more than $50 billion above analysts’ expectations.Anthony Saglimbene, chief market strategist at Ameriprise, told Bloomberg, ““If Amazon is now spending so much that it has negative cash flow, that’s a major concern and a red flag, and investors are increasingly viewing it as such.”

Amazon stock downgraded to Neutral

Analysts at DA Davidson downgraded Amazon’s stock last week to Neutral from a Buy Rating over concerns around its spending plans, risks to its cloud dominance and the potential for AI to erode its retail business. “With the context of results from Microsoft and Google, we see AWS continuing to lose its lead and now scrambling to catch up through escalating investment,” the analysts wrote in a research note, as per a report in CNBC. “We are also increasingly concerned about Amazon retail’s transition to a new chat-driven internet dominated by Gemini and ChatGPT,” it added.

What Amazon CEO Andy Jassy said on rising Capex

During the earnings call, Amazon CEO Andy Jassy said in prepared remarks that he was “confident” that the company’s cloud unit will see a “strong return on invested capital,” though he didn’t say when it could materialize. Jassy said the company needs the capital to keep pace with “very high demand” for Amazon’s AI compute, which requires more infrastructure such as data centers, chips and networking equipment. “This isn’t some sort of quixotic, top-line grab,” Jassy said. “We have confidence that these investments will yield strong returns on invested capital. We’ve done that with our core AWS business. I think that will very much be true here as well.”

Investors to Big Tech: Show us the cash

Amazon is not the only one worrying investors who have become increasingly concerned about how much big tech companies are spending on artificial intelligence. The issue also weighed on both Microsoft Corp. and Alphabet Inc. The four biggest spenders — Amazon, Alphabet, Microsoft and Meta Platforms Inc. — have together forecast capital expenditures of about $650 billion in 2026. If these big tech companies “have negative or weaker cash flow on account of this spending, that’s a dynamic shift in how they should be valued, especially if we go through a period of market stress or AI evolves in a way that they or the market is not anticipating,” Saglimbene said.