Amazon shares plunged 7% despite accelerating growth in its AWS cloud business, as investors focused on a dramatic deterioration in free cash flow driven by aggressive artificial intelligence spending. The company's free cash flow swung by roughly $57 billion into negative territory, moving from a $15 billion cash surplus to a $42 billion deficit.
Amazon plans approximately $220 billion in capital spending in 2026, fueling concerns that AI infrastructure costs are outpacing returns. The selloff has put Amazon and Intel at risk of a combined $300 billion market value wipeout, while Nasdaq futures tumbled as AI spending anxieties deepened.
Strong cloud demand was not enough to reassure technology investors, with the broader selloff signaling growing Wall Street skepticism toward massive AI-related expenditures.
