Stock Market Plummets Amid Amazon Earnings Miss
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 06 2026
0mins
Should l Buy AMZN?
Source: Yahoo Finance
- Market Decline: The stock market experienced a significant sell-off on Thursday, with major indices declining broadly, reflecting investor concerns about the economic outlook amid high inflation and rising interest rates, which have dampened market confidence.
- Bitcoin Crash: Bitcoin prices fell sharply, driven by a bearish market sentiment as investors rushed to sell off crypto assets, likely due to concerns over increased regulation in the crypto market and a general rise in risk aversion.
- Amazon Earnings Miss: Amazon's stock price dropped following its earnings report, primarily due to concerns over its massive capital spending plans, which raised investor apprehensions about future profitability, highlighting the tension between expansion and earnings.
- Capital Expenditure Impact: While Amazon's capital expenditure plans aim to drive long-term growth, they may negatively affect cash flow and shareholder returns in the short term, leading to lowered market expectations for its future performance.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
47 Analyst Rating
46 Buy
1 Hold
0 Sell
Strong Buy
Current: 199.600
Low
250.00
Averages
294.69
High
340.00
Current: 199.600
Low
250.00
Averages
294.69
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Results: Despite narrowly missing earnings expectations, Amazon reported a 14% year-over-year revenue increase to $213 billion in Q4, driven by robust growth in advertising and cloud computing, highlighting the company's competitive position in rapidly growing markets.
- Capital Expenditure Plans: Amazon plans to increase capital expenditures to $200 billion by 2026, a 56% rise from $128 billion in 2025, raising investor concerns about the company's financial health, particularly regarding its significant investments in AI infrastructure.
- Accelerating Cloud Growth: Amazon Web Services (AWS) saw a 24% revenue increase in Q4, the fastest growth in 13 quarters, with CEO Andy Jassy noting that the custom chip business has surpassed a $10 billion annual revenue run rate, indicating that AI investments are beginning to yield returns.
See More
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- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2026, primarily for data center construction, which may impact cash flows; however, if AI computing demand continues to grow, this investment will support future business expansion.
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- Surge in Capital Expenditures: Tech giants like Amazon and Google have significantly raised their capital expenditure outlooks, with Amazon projecting spending to reach $200 billion, far exceeding the $147 billion consensus, which could impact stock performance and investor confidence.
- Intensified Market Competition: The rapid advancement of AI technology raises questions about the value of enterprise software, leading investors to adopt a pessimistic view on the future of traditional software companies, especially in labor-intensive areas that may face workforce reductions due to AI adoption.
- Investor Confidence Shaken: Despite significant advancements by companies like Anthropic and OpenAI in the AI space, market confidence in traditional software companies is waning, resulting in poor stock performance over the past six months and raising concerns about future profitability.
See More
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- Surging Capital Expenditures: Amazon plans to increase capital expenditures from $132 billion last year to $200 billion by 2026, which could lead to negative free cash flow but reflects the company's confidence in future revenue growth.
- AWS Revenue Growth: Amazon Web Services (AWS) achieved a 24% revenue growth over the past year, reaching $35.6 billion, with expectations for continued acceleration driven by surging demand from AI startups.
- Record Operating Earnings: Despite declining free cash flow due to infrastructure investments, Amazon's operating earnings hit a record high of $85 billion over the last 12 months, showcasing strong performance in both retail and cloud businesses.
- Long-Term Growth Potential: If Amazon can achieve a 15% annual revenue growth over the next three years, its revenue could exceed $1 trillion by 2030, with a 15% profit margin translating to $150 billion in net earnings, nearly double current levels.
See More
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- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures by 2026, a significant increase from last year's $132 billion, which could lead to negative free cash flow in 2026, yet reflects the company's confidence in future revenue growth.
- AWS Revenue Growth: Amazon Web Services (AWS) achieved a 24% year-over-year revenue growth to $35.6 billion, with expectations for continued demand, particularly driven by spending needs from artificial intelligence startups.
- Record Operating Earnings: Despite declining free cash flow due to infrastructure investments, Amazon's operating earnings reached a historic high of $85 billion over the past 12 months, indicating expanding margins in both its retail operations and AWS.
- Long-Term Growth Potential: If Amazon can achieve a 15% annual revenue growth over the next three years, it is projected to exceed $1 trillion in revenue by 2030, with a 15% profit margin translating to $150 billion in net earnings, nearly double current levels.
See More
Amazon's Capital Spending Sparks Market Concerns
- Capital Expenditure Plans: Amazon plans to spend up to $200 billion on capital expenditures in 2026, a significant increase from $132 billion last year, which may lead to negative free cash flow but indicates the company's confidence in future revenue growth.
- AWS Revenue Growth: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase to $35.6 billion, with expectations for continued demand, particularly from AI startups, further driving the company's revenue growth.
- Operating Earnings Performance: Despite heavy upfront investments, Amazon's operating earnings reached a record high of $85 billion over the past 12 months, reflecting margin expansion in retail and strong AWS performance, with this trend expected to continue into 2026.
- Long-Term Growth Potential: If Amazon achieves a 15% annual revenue growth over the next three years, it could exceed $1 trillion in revenue by 2030, resulting in $150 billion in net earnings at a 15% profit margin, nearly double current levels, showcasing strong long-term investment value.
See More
