Amazon.com Inc. (AMZN) extended its decline on Friday, closing at $198.79 after a 0.4% drop. This session marked the ninth consecutive daily loss for the e-commerce and cloud computing giant, representing its most prolonged period of decline since 2006. The persistent sell-off has erased approximately 18% of the stock's value during this streak, pushing shares more than 20% below their November 2025 high. By the conventional market definition, this decline qualifies as a bear market for the stock.
AI Spending at the Core of Investor Anxiety
The downturn reflects broader market apprehension surrounding major technology companies' aggressive investments in artificial intelligence infrastructure. Investors are increasingly demanding clearer timelines for returns on these substantial capital outlays. The debate intensified following Amazon's projection of roughly $200 billion in capital expenditures for 2026, a significant increase from the $131 billion planned for the prior year. This spending is earmarked for expanding data center capacity, developing custom chips, and building related AI infrastructure.
CEO Andy Jassy has defended the strategy, emphasizing the challenge of achieving high growth rates on Amazon's already massive revenue base. However, skepticism persists among investors and analysts. Dave Wagner, a portfolio manager at Aptus Capital Advisors, summarized a common sentiment, noting the market's dislike for the "substantial amount of money that keeps getting put into capex for these growth rates." Analysts at MoffettNathanson observed that while rising capital intensity was expected, "the sheer scale of the spend is well above what consensus had in mind."
Broader Tech Sector Rotation
The pressure on Amazon is part of a wider rotation away from technology stocks where future positive surprises may be difficult to achieve, as noted by Russ Mould, investment director at AJ Bell. This dynamic has also weighed on other cloud-focused companies, including Microsoft (MSFT) and Alphabet (GOOGL), as the market reassesses the payoff horizon for massive AI investments.
Adding to the narrative, a securities filing revealed that Douglas J. Herrington, CEO of Worldwide Amazon Stores, sold 1,000 shares at $208 each on February 11. The transaction, executed under a pre-arranged Rule 10b5-1 trading plan established in November, reduced his holdings to 504,934 shares.
Market Context and Upcoming Catalysts
Trading activity will pause on Monday as U.S. equity markets observe Washington's Birthday. The holiday-thinned liquidity often leads to amplified price movements, a particular risk for stocks already under pressure like Amazon. Normal trading resumes on Tuesday.
Investors will next turn to macroeconomic cues, with the Federal Reserve scheduled to release the minutes from its January 27-28 policy meeting on Wednesday, February 18. Growth-oriented stocks, including Amazon, have been sensitive to expectations that interest rates may remain elevated for longer, which diminishes the present value of future earnings.
Furthermore, the market will closely monitor NVIDIA Corporation's (NVDA) earnings report, scheduled for February 25. The chipmaker's guidance is widely viewed as a barometer for data-center demand and the pace at which major cloud service providers, or "hyperscalers" like Amazon Web Services (AWS), are accelerating their infrastructure spending.
Strategic Crossroads
The current trade presents a dichotomy. Some investors may view Amazon's aggressive expansion as a necessary defensive move to protect AWS's market leadership, which could ultimately stabilize the stock. Conversely, if the company's expenses continue to outpace sales growth, or if the returns on its AI investments appear too distant, the decline could persist.
Traders are poised to assess whether selling pressure abates when markets reopen on Tuesday. With key events like the Fed minutes and NVIDIA's earnings call on the horizon, the narrative around AI spending—and its impact on Amazon's valuation—remains finely balanced.
