• Amazon (AMZN) shares are on track for their longest losing streak in nearly 20 years, down 0.8% Friday and nine days in a row.
  • The stock has lost 18%, erasing $470 billion in value, as investors fret over $200 billion in planned 2026 spending on data centers, chips, and AI.
  • Negative cash flow at this scale is a major red flag, says Ameriprise strategist Anthony Saglimbene, with big tech's $650 billion AI spend next year also fueling concerns.

Amazon's extended market slump, now its worst since April 2022, has pushed the Nasdaq 100 down 3.2% this month, reflecting broader investor unease over capital discipline in the tech sector. The decline comes despite the company reporting solid underlying business performance, with AWS showing 24% year-over-year growth in Q4 and customers using its Bedrock AI tool increasing 60% sequentially.

Efforts to reassure markets have hit a snag, according to people familiar with the matter, as CEO Andy Jassy's announcement of the massive 2026 expenditure—framed as essential for capturing AI-driven demand—has instead triggered a selloff. Without a clearer path to returns, analysts warn the company could face sustained pressure on its valuation, which currently trades at an elevated price-to-free cash flow ratio of 296.

"We're monetizing capacity as fast as we can install it," Jassy said in recent remarks, but investors remain skeptical. The concern is amplified by the industry's collective $650 billion AI spend planned for 2026, raising questions about whether such commitments will yield proportionate returns. Amazon's trailing 12-month free cash flow has already decreased from $38.2 billion to $11.2 billion year-over-year, a significant contraction directly tied to capital spending.

Market technicians note that Amazon's relative strength index has fallen below 30, indicating extremely oversold conditions. Historically, similar dips have preceded rallies of around 60%, suggesting a potential reversal pattern if sentiment shifts. Still, recent rally attempts, including one on February 6, showed minimal follow-through, keeping momentum with sellers for now.

Analyst sentiment has remained largely supportive despite the decline, with firms including Morgan Stanley, Wells Fargo, and Argus maintaining Buy ratings and setting price targets of $300 or higher, implying 40%+ upside from current levels around $203-210. "It's a disconnect between fundamentals and sentiment," one anonymous source close to the situation said, pointing to Amazon's position as the world's largest company by sales on a trailing 12-month basis.

As negotiations over capital allocation priorities continue internally, stakeholders from employees to partners are watching closely. The filing deadline for quarterly updates looms, adding urgency to the company's communications strategy. Attempts to reach Amazon for additional comment were unsuccessful, but sources indicate ongoing reviews of spending timelines.

In a slight correction to earlier reports, the 18% decline refers to the drop from recent highs, not year-to-date performance. Looking ahead, if Amazon's AI investments begin to show demonstrable returns, the current pessimism could prove temporary—otherwise, the stock may remain under pressure indefinitely, testing the patience of even long-term holders.