Amazon’s stock has dropped sharply in early February 2026 mainly because the company shocked investors with a massive jump in planned spending for 2026, even though its latest earnings were generally solid.

Quick Scoop: What happened to Amazon stock?

  • Amazon reported Q4 2025 revenue of about 213 billion dollars, slightly above Wall Street expectations, and continued strong growth in its AWS cloud business.
  • Despite this, the stock fell roughly 8–9% after the report as investors focused on guidance rather than the headline beat.
  • The biggest shock: Amazon said it plans around 200 billion dollars in capital expenditures (capex) for 2026, far above the roughly 146 billion dollars analysts were expecting.
  • That capex surge raised concerns about profit margins, free cash flow, and how long it might take for these big AI, chips, robotics, and satellite investments to pay off.
  • The drop also comes in the middle of a broader rotation out of expensive tech and AI names after a long run-up, which amplifies any negative surprise.

Key numbers and guidance

  • Q4 2025 revenue: about 213.4 billion dollars, up around 13–14% year over year, and above consensus estimates.
  • EPS: missed by roughly one cent versus expectations, a small miss but enough to feed the “high expectations” narrative.
  • Q1 2026 revenue outlook: around 173.5–178.5 billion dollars, basically in line with or slightly above consensus.
  • 2026 capex outlook: about 200 billion dollars vs. roughly 146 billion dollars expected by Wall Street.

Why the market freaked out

From a story perspective, this is less “Amazon is doing badly” and more “the bill for the future arrived sooner than expected”:

  1. Capex shock, not demand problem
    • Amazon highlighted big opportunities in AI, chips, robotics, and low‑earth‑orbit satellites (Project Kuiper/LEO) and said it needs massive investment to capture them.
 * Investors worry that so much spending will pressure margins in the near term, even if it could boost profits years down the road.
  1. High expectations and rich valuation
    • After years of strong performance and an AI-driven tech boom, Amazon was priced for clean execution and strong free‑cash‑flow growth.
 * Even a small EPS miss plus a huge jump in planned spending can flip sentiment quickly when a stock is viewed as “expensive.”
  1. Macro and tech-sector mood
    • There is an ongoing rotation out of broad “AI winners” into more selective bets, with some investors trimming large-cap tech after big prior gains.
 * Concerns about consumer strength, holiday spending trends, and overall valuation in mega‑cap tech add to the pressure on Amazon’s share price.

How Wall Street and forums are reacting

  • Some big firms, like Bernstein, still see 2026 as one of the most attractive bull cases for Amazon since the pandemic, pointing to accelerating AWS growth and improving retail margins.
  • Others remain cautious or trim price targets, citing AI competition risk, high spending, and questions about return on those AI and satellite investments.
  • On forums, you see confused posts along the lines of “Why is Amazon stock dropping when earnings looked good?”, with many pointing to the capex guide and broader tech weakness as the main culprits.

Big picture: what it means

  • Short term : The stock is under pressure because investors are repricing Amazon around lower near‑term free cash flow and higher execution risk on huge AI and infrastructure bets.
  • Long term : If Amazon executes, those same investments (AWS capacity for AI, robotics in fulfillment, satellites, advertising, etc.) could support stronger growth and margins later this decade—several analysts still rate the stock “Outperform” or equivalent for that reason.

This is not financial advice. Always do your own research and consider speaking with a licensed financial advisor before making investment decisions.

TL;DR: Amazon stock dropped mainly because its 2026 spending plans were much higher than Wall Street expected, stoking fears about profits and cash flow, even though its business fundamentals (revenue, AWS growth, retail trends) are still solid.

Information gathered from public forums or data available on the internet and portrayed here.