tech
February 7, 2026
Jim Cramer: Amazon spending looks painful but it's not a reason to sell the stock
Amazon shares fell 7% on Friday after management issued a 2026 capital expenditures guide of $200 billion.
TL;DR
- Jim Cramer advocates for investor patience with Amazon's substantial spending strategy, despite risks to profits.
- Amazon announced a 2026 capital expenditures forecast of $200 billion, exceeding expectations and causing a stock price decline.
- The spending is primarily allocated to AWS infrastructure, AI, and custom chips to meet rising cloud demand.
- Amazon Web Services (AWS) saw accelerated cloud growth of 24% year over year, with a significant backlog of $244 billion.
- Concerns exist regarding Amazon's future free cash flow due to the high capital expenditures.
- Wall Street firms have cut Amazon's price targets, with some analysts citing competition from Google Cloud and Microsoft Azure, and potential disadvantages in integrating AI platforms.
- Nvidia CEO Jensen Huang defended Big Tech's capital expenditures as appropriate and sustainable, despite Amazon and others developing custom chips.
Continue reading the original article