Wall Street Sours on Amazon's Massive AI Spending

Investors worry Amazon's $200 billion in capital expenditures will lead to negative free cash flow in 2026.

Published on Feb. 15, 2026

Got story updates? Submit your updates here. ›

Shares of Amazon (NASDAQ: AMZN) have underperformed the broader market in recent years, with the stock up just 22% cumulatively in the last five years compared to an 87% total return for the S&P 500. After Amazon's latest earnings report, Wall Street has soured on the e-commerce and cloud computing giant due to its ambitious capital spending plans, which could lead to negative free cash flow in 2026.

Why it matters

Amazon's massive investments in data center infrastructure to support the growing demand from AI companies like Anthropic have investors concerned about the short-term impact on the company's financials. However, this spending could position Amazon to capitalize on the long-term growth of the cloud computing and AI markets.

The details

Amazon Web Services (AWS), the company's cloud infrastructure division, is seeing resurgent demand because of the insatiable spending needs of artificial intelligence (AI) start-ups. To build enough data centers to meet customer demand, Amazon plans to spend $200 billion on capital expenditures this year, up from $132 billion last year and $83 billion the year before. This exceeds Amazon's 2025 operating cash flow of $140 billion, likely leading to negative free cash flow in 2026.

  • In the fourth quarter of 2025, Amazon reported record operating earnings of $85 billion over the last 12 months.
  • Amazon plans to spend $200 billion on capital expenditures in 2026, up from $132 billion in 2025 and $83 billion the year before.

The players

Amazon

A trillion-dollar technology giant that operates e-commerce, cloud computing, and other businesses.

Anthropic

An AI start-up that is a fast-growing customer of Amazon Web Services, spending billions of dollars per year with the cloud division.

Got photos? Submit your photos here. ›

What they’re saying

“Investors are scared because this exceeds Amazon's 2025 operating cash flow of $140 billion, likely leading to negative free cash flow in 2026.”

— Brett Schafer, Author (yahoo.com)

What’s next

Once Amazon's accelerated AI investments are finished, free cash flow should begin to converge back with operating earnings. If Amazon can grow its consolidated revenue by 15% a year over the next three years, the business will be doing over $1 trillion in revenue by the end of the decade.

The takeaway

While Amazon's short-term free cash flow may be impacted by its massive investments in cloud infrastructure to support AI demand, this spending could position the company to capitalize on the long-term growth of the cloud computing and AI markets. Investors who take a patient, long-term view may find Amazon to be an attractive stock at current levels.