Amazon’s Extreme AI Spending Sends Stock to Worst Month in Years

Core Insights - Amazon.com Inc. is facing investor skepticism regarding its aggressive artificial intelligence spending, leading to a significant drop in its stock price [1][2] - The company's shares fell 12% in February, marking its worst month since December 2022, and it was the weakest performer among the Magnificent Seven technology companies [2][3] - Analysts are concerned that Amazon's high capital expenditures are not yielding sufficient returns, with some describing the situation as a cautionary tale within Big Tech [4] Financial Performance - Amazon's planned capital expenditures for 2023 are projected at $200 billion, significantly higher than market expectations, which has negatively impacted its operating income forecast [6] - The company is expected to report a negative free cash flow of $524.2 million in 2026, marking its first year of negative cash flow since 2022, following a reported free cash flow of $7.7 billion in 2025 [7] Investment Strategies - Amazon announced a $50 billion investment in OpenAI, which is part of a larger agreement where OpenAI will spend an additional $100 billion over eight years with Amazon Web Services [5] - The recent earnings report and spending plans have overshadowed the fastest quarterly growth for Amazon Web Services in over three years [6]