{"id":459753,"date":"2026-02-07T13:09:21","date_gmt":"2026-02-07T13:09:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/459753\/"},"modified":"2026-02-07T13:09:21","modified_gmt":"2026-02-07T13:09:21","slug":"amazon-shares-sink-as-big-techs-ai-spending-plans-worry-investors","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/459753\/","title":{"rendered":"Amazon shares sink as Big Tech\u2019s AI spending plans worry investors"},"content":{"rendered":"

Amazon shares (AMZN-Q<\/a>) dropped 8 per cent in premarket trading on Friday \u200bafter the company\u2019s hefty capital \u200dexpenditure plans deepened investor worries over Big Tech\u2019s spending spree on artificial intelligence.<\/p>\n

Massive AI spending by companies – estimated to be \u200dmore \u200bthan US$600-billion this year – have raised doubts among investors over the prospects of immediate returns from the huge capital outlays.<\/p>\n

They also fear that rapidly improving AI tools could eat into demand for traditional \u2060software, squeezing profit margins, resulting in a broader selloff across the tech sector.<\/p>\n

Amazon\u2019s capex spending plans are expected to reach US$200-billion in 2026. Alphabet said its capex could double from a year \u200cago, while Meta \u200dand Microsoft has ramped up their spending plans.<\/p>\n

\u201cWhile the \u200drising capital intensity is not a \u200csurprise directionally, the magnitude of the spend is \u2060materially greater than consensus expected,\u201d MoffettNathanson analysts said in a note.<\/p>\n

In \u200bcontrast to Alphabet\u2019s confident tone on its spending plans, Amazon CEO Andy Jassy struck a defensive note during the post-earnings investor call.<\/p>\n

\u201cAs a reminder,\u201d said Jassy, referring to the results of cloud platform \u200bAmazon Web Services, \u201cit\u2019s very different having 24 per cent year-over-year growth on US$142-billion annualized run rate, than to have a higher-percentage growth on a meaningfully smaller base, which is the case with our competitors.\u201d<\/p>\n

AWS revenue grew to US$35.6-billion in the December quarter, while Google \u2060Cloud grew 48 per cent to US$17.75-billion. Microsoft\u2019s Azure surged 39 per cent \u2060in the same period.<\/p>\n

\u201cWe do not think they would be spending US$200B in FY26 \u200cif they did not have the appropriate demand signals, but the margin of error is shrinking,\u201d MoffettNathanson analysts said.<\/p>\n

At least five brokerages have reduced their price targets on the stock following results. Amazon trades at a price-to-earnings \u200cratio of 27.01, compared with Microsoft\u2019s 21.62 and Alphabet\u2019s 28.36.<\/p>\n","protected":false},"excerpt":{"rendered":"Amazon shares (AMZN-Q) dropped 8 per cent in premarket trading on Friday \u200bafter the company\u2019s hefty capital \u200dexpenditure…\n","protected":false},"author":2,"featured_media":459754,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,901,276,277,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-459753","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alberta","tag-artificial-intelligence","tag-artificialintelligence","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/459753","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=459753"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/459753\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/459754"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=459753"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=459753"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=459753"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}