Amazon Stock Down 22% From High, But Still a Buy

The tech giant's aggressive AI investments have weighed on its share price, but its long-term potential remains strong.

Feb. 22, 2026 at 1:25pm

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Amazon (AMZN) stock has fallen 22% from its all-time high as the company ramps up spending on AI, robotics, and other growth initiatives. While this has pressured its near-term free cash flow, Amazon's balance sheet remains strong and its high-margin AWS segment continues to see increased demand. Analysts see the current sell-off as a buying opportunity for patient investors given Amazon's reasonable valuation and long-term growth prospects.

Why it matters

Amazon is one of the "Magnificent Seven" tech giants, and its performance is closely watched as a bellwether for the broader market. The company's aggressive investments in emerging technologies like AI and robotics highlight its ambition to stay at the forefront of innovation, but have raised concerns about near-term profitability.

The details

Amazon stock is down 18.4% from its all-time high as the company ramps up capital expenditures, which jumped from $77.7 billion in 2024 to $128.3 billion in 2025. This has weighed on the company's free cash flow, which declined from $38.2 billion in 2024 to just $11.2 billion in 2025. However, Amazon's operating cash flow grew 20% year-over-year, and the company exited 2025 with a strong $57.3 billion in cash and cash equivalents net of long-term debt.

  • Amazon stock is down 10% year-to-date in 2026.
  • Amazon stock rose just 5.2% in 2025, underperforming its "Magnificent Seven" peers.

The players

Amazon

An American multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence.

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What they’re saying

“Amazon has the balance sheet to take a big risk. It exited 2025 with $57.3 billion in cash, cash equivalents, and marketable securities net of long-term debt -- meaning even if it takes on debt to fund its AI spending, its balance sheet would still be in good shape.”

— Daniel Foelber

The takeaway

Despite the near-term pressure on Amazon's stock price due to its aggressive AI and growth investments, the company's strong balance sheet, high-margin AWS segment, and reasonable valuation make it an attractive long-term buy for patient investors.