Amazon is staring down a historic losing streak that has erased roughly $450 billion in market value, as investors recoil from the company’s aggressive artificial intelligence spending plans. If shares close lower again, the stock will log its 10th consecutive negative session — matching its longest stretch of daily losses since going public in 1997.

The decline reflects more than short-term volatility. It underscores a broader reckoning in U.S. equity markets, where enthusiasm over AI-driven growth is colliding with concerns about capital intensity, free cash flow pressure and execution risk.

Capex Shock: The $200 Billion Commitment

The catalyst for the sell-off was Amazon’s fourth-quarter earnings report, where management disclosed plans to spend approximately $200 billion in capital expenditures this year — nearly 60% higher than last year and more than $50 billion above Wall Street expectations.

Much of the investment is earmarked for AI infrastructure, including data centers, advanced chips and networking equipment. The scale of spending positions Amazon alongside peers such as Alphabet, Microsoft and Meta, whose combined capital expenditures could approach $700 billion this year as Big Tech races to dominate generative AI.

While CEO Andy Jassy defended the outlay as a high-return opportunity, analysts note that the timeline for monetizing AI infrastructure remains uncertain. The issue for investors is not strategic ambition, but the lag between spending and revenue realization.

Free Cash Flow Under Pressure

The market’s reaction suggests a shift in investor psychology. During earlier phases of the AI rally, capital spending was viewed as a competitive moat. Now, shareholders are scrutinizing whether the returns will justify the scale.

Amazon shares have dropped roughly 18% since early February, reflecting skepticism about whether AI investments will compress margins before generating meaningful growth. Wedbush analysts described the company as being in “prove it mode,” signaling that tangible evidence of return on invested capital will be required to stabilize sentiment.

This skepticism extends beyond Amazon. Shares of Alphabet and Microsoft have also weakened, suggesting broader concerns about the sustainability of AI-driven capital cycles.

AWS: The Strategic Core

Despite the turbulence, some analysts remain constructive, particularly regarding Amazon Web Services. AWS CEO Matt Garman highlighted plans to double data center capacity by 2027, a move viewed by bullish investors as an underappreciated growth catalyst.

The bet is straightforward: expanded capacity will accelerate cloud revenue growth as enterprise AI adoption deepens. If successful, AWS could offset short-term cash flow strain and reassert Amazon’s leadership in high-margin infrastructure services.

For investors in the U.S. and Israel monitoring global tech valuations, Amazon’s correction may represent either a structural reset or a cyclical pause. The stock’s trajectory will hinge on early signals of AI monetization, margin resilience and competitive positioning.

As markets digest the scale of AI capital deployment across Big Tech, the coming quarters may determine whether this pullback is a warning sign — or a strategic entry point for long-term capital.