Amazon leads Big Tech’s $1 trillion wipeout as AI bubble fears ignite sell-off

February 6, 2026

TL;DR

Amazon shares dropped more than 5% following a large spending forecast for AI, raising investor concerns about a potential AI bubble.
Major tech companies like Alphabet, Microsoft, Meta, and Amazon announced significant increases in capital expenditures, totaling about $120 billion in Q4 alone and potentially exceeding $660 billion this year.
The collective market valuation of Amazon, Microsoft, Nvidia, Meta, Google, and Oracle fell by over $1 trillion in the past week, with Amazon experiencing the largest decline.
Analysts are questioning the return on investment for AI build-outs and the risk of over-expansion, leading to volatility in hardware companies' stocks.
Amazon's projected capital expenditures of $200 billion by 2026 exceeded analyst expectations by over $50 billion, causing investor unease due to a lack of visibility.
D.A. Davidson downgraded Amazon's stock, citing concerns about spending, potential loss of cloud market share to competitors like Microsoft and Google, and the erosion of its retail business by AI-driven interfaces.
In contrast, Apple has seen its stock rise due to strong iPhone demand, having committed less to capital expenditures for AI compared to other Big Tech firms.
The current investment climate in AI is described as 'binary,' with the potential for either significant returns or a 'huge waste of shareholder's cash'.

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