Amazon’s $200B Capex Plan Sparks Stock Selloff Despite Cloud Growth

Amazon shares plunged 9% as Wall Street balked at the company's aggressive $200 billion capital expenditure plan for 2026, exceeding analyst expectations by $50 billion. The tech giant's cloud division showed strong performance with AWS revenue growth accelerating to 24%, beating estimates, but investors focused on the risks of overcapacity in AI infrastructure spending.

Fourth-quarter results revealed a mixed picture: $1.95 EPS missed by a penny while revenue hit $213.4 billion, up 13.6% year-over-year. AWS backlog growth outpaced revenue by 40%, signaling strong future demand, yet concerns persist about profitability of major AI clients like Anthropic and OpenAI.

Bank of America maintained its Buy rating but trimmed the price target to $275, acknowledging near-term margin pressure from the infrastructure buildout. The market's reaction highlights growing scrutiny of big tech's massive AI investments amid uncertain returns.