From fear of falling behind to "show results," the market is repricing the billion-dollar AI race.

Amazon 's shares opened lower on Friday, February 6th. The reason is a "punishment" for a message the market had been fearing to hear: the cost of artificial intelligence (AI) is going to rise, and fast.

After releasing its fourth-quarter 2025 earnings report the previous night, the company presented lower-than-expected short-term guidance and raised its infrastructure investment ambitions to a new level, putting further pressure on a sector undergoing a week of adjustment.

Shares fell nearly 10% in reaction to the bad news. The company said it expects operating profit between $16.5 billion and $21.5 billion in the first quarter of this year, below the consensus of $22.2 billion.

This projection includes $1 billion in additional costs related to its low Earth orbit (LEO) satellite unit, under the Kuiper project umbrella.

But what is impacting the stock the most is that Amazon has stated it intends to invest around US$200 billion in capital expenditures in 2026, a large jump from the US$125 billion projected for 2025 and above what Wall Street expected.

In a statement to the market, CEO Andy Jassy stated that he anticipates a strong long-term return on invested capital: "We are confident that these investments will yield strong returns."

The problem is that market sentiment has shifted, and investors are no longer afraid of being last in the AI race, but are questioning how it's unfolding and the lack of visibility on when the return will come.

One example is Apple , which historically committed less capital expenditure than other giants and had been under pressure due to its AI strategy, but saw its shares rise 7% since Monday following demand for the iPhone, described by Tim Cook as "impressive".

According to CNBC , Michael Field, chief equity strategist at Morningstar, said the bet is becoming "binary": these investments either pay off handsomely or become a significant waste of shareholder cash.

From the fear of "being left behind" to "show me"

The reaction to Amazon fits into a broader repricing movement in the sector. According to CNBC , a group comprised of Microsoft , Nvidia, Oracle, Meta Platforms, Amazon, and Alphabet saw $1.35 trillion erased from their valuations over the past week, based on FactSet data.

The reaction shows that the billion-dollar capital expenditure has ceased to sound like a promise of growth and has begun to function as a sell-off trigger. And the amount of investment is only increasing.

According to the WSJ , Microsoft, Meta, Alphabet, Amazon, and Oracle, which are expanding and funding data centers in response to the surge in demand for AI-related computing, plan to spend more than $700 billion in 2026, based on company information and analyst projections—an amount the newspaper describes as close to Japan's 2026 budget and higher than those of Germany and Mexico.

The question that has come to dominate Wall Street sentiment, therefore, is not whether the demand exists. Amazon insists that it does: it says it sells data center capacity as fast as it can get it up and running, and that the demand is long-term. But the question is when infrastructure investment starts to outpace revenue growth.

There is growing concern that the sector is spending too fast and that a slowdown in the growth of cloud computing (the sale of data center capacity like AWS) will reignite the specter of an AI 'bubble'.

The quarterly results, by themselves, do not suggest operational weakness. Amazon reported earnings per share (EPS) of $1.95 on revenue of $213.4 billion, virtually in line with the consensus of $1.96 and above the expectation of $211.5 billion in revenue.

The WSJ reports that net income for the period was $21.2 billion, in line with expectations. At AWS, the company delivered $35.6 billion in revenue—above expectations. In other areas, advertising exceeded $21.3 billion, and the online store business reached $82.9 billion in the quarter.

Even so, the market returns to the "mix" and finds a sensitive point: AWS grew 24%, a robust pace, but below what rivals showed in the same period.

Azure, for example, grew 39%, and Alphabet 's cloud advanced 48%. Amazon counters the comparison of pure rates by arguing that its user base is larger and that growing on top of it is a different game. But this week, investor logic has been simpler: if capex accelerates, monetization needs to be convincing.

In this environment, analysts project that volatility is likely to continue, including in companies linked to the expansion's hardware.

Amazon, for its part, is trying to show that it's not just about spending more — but about spending and reorganizing. The company has been cutting costs and operations: new layoffs and a total of around 30,000 cuts since October, about 10% of the corporate workforce, in addition to the closure of Fresh and Go stores and the reduction of parallel ventures, such as Amazon One in physical stores starting June 6 (maintained in clinics).

There was also a change in leadership at the AI unit: Rohit Prasad was succeeded by Peter DeSantis, an AWS veteran, in an attempt to accelerate the delivery of AI services and customized chips. But at the same time, the appetite for investment only increases. The WSJ mentions talks for a possible investment of up to US$50 billion in OpenAI.