"Specifically, analysts pulled some numbers out of their... hat, and decided that Amazon would end up spending $150 billion on CapEx for 2026. Amazon then proclaimed that it was going to be a lot closer to $200 billion ("no worries, you only missed by the GDP of Croatia"), and the industry spent the next two business weeks just beating the absolute stuffing out of their stock for it. How badly? Shares fell 11% after hours, then kept falling for nine straight sessions - the longest losing streak since 2006 - erasing more than $450 billion in market value. That's more than the entire market cap of most companies that analysts are supposedly experts at evaluating."
""If you look at the capital we're spending and intend to spend this year, it's predominantly in AWS. Some of it is for our core workloads, which are non-AI workloads, because they're growing at a faster rate than we anticipated. But most of it is in AI, and we just have a lot of growth and a lot of demand.""
"Some folks compared the move to Amazon's overinvestment in shipping during the pandemic, while company leadership characterized the spending as driven by AWS and AI demand rather than a quixotic top-line grab. AWS CEO Matt Garman said, "Even with all of this investment, my best estimation is we will be capacity constrained for the next couple of years. We will sell every single server and"
Analysts had projected $150 billion in capital expenditure for 2026, while Amazon signaled capex closer to $200 billion. Shares fell 11% after hours and continued declining for nine straight sessions, erasing more than $450 billion in market value. Some observers compared the situation to pandemic-era overinvestment in shipping. Company leadership stated that the spending is predominantly for AWS, with some allocation to faster-growing non-AI core workloads and most toward AI due to significant growth and demand. AWS leadership also indicated expected capacity constraints and very strong server sales for the next several years.
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