By Christine JiBig Tech stocks are being hit by fears of AI overspending, but some are more at risk than othersShares of Amazon and Microsoft have officially retreated more than 20% from recent highs.Investors are pushing back hard against Big Tech's aggressive artificial-intelligence spending plans, causing shares of the &#34;Magnificent Seven&#34; companies to fall dramatically.After eight consecutive days of losses, shares of Amazon.com (AMZN) have officially tumbled into a technical bear market, meaning that they're off 20% or more from their recent high. Amazon's stock closed at $199.60 on Thursday, 21.4% below its recent high.Among the four major hyperscalers, Amazon has the highest amount of planned capital expenditures for 2026, at $200 billion. Amazon, Microsoft (MSFT), Meta Platforms (META) and Alphabet (GOOGL) (GOOGL) are expected to spend a cumulative $650 billion on AI capex in 2026.Amazon joins Microsoft as the second &#34;Magnificent Seven&#34; name that's fallen into bear-market territory. Shares of Microsoft entered a bear market on Jan. 29, one day after the company reported Azure cloud growth that fell short of investors' expectations. As of Thursday's close, Microsoft's stock is down 25.9% from its recent high.Meta looks positioned to be next, as shares are 2.3% away from reaching bear-market territory, according to Dow Jones Market Data. While Meta's fourth-quarter revenue and earnings results beat Wall Street's expectations, increased AI spending and margin pressure have weighed on investor sentiment.Read: Why Amazon's AI spending triggered the stock's worst slide in over a yearThe recent selloff highlights a growing rift between members of the &#34;Magnificent Seven,&#34; Mike Treacy, vice president of risk at Apex Fintech Solutions, told MarketWatch.Since the fall, investors have rotated out of the OpenAI trade associated with names like Microsoft, Nvidia (NVDA) and Oracle (ORCL) amid rising concerns over circular financing deals. Instead, they've begun favoring the Alphabet and Broadcom (AVGO) ecosystem, Treacy said.Alphabet's vertically integrated tech stack has offset some of the overspending fears and shielded the stock from the worst of the tech selloff, Treacy added. Shares of Alphabet closed on Thursday down 9.2% from their recent high.&#34;I do think Google's self-sufficiency should command a premium relative to the others that could be adversely impacted by one cog in the wheel,&#34; Treacy said, referring to Google's proprietary tensor processing units.On the other hand, shares of Amazon, Microsoft and Meta are being hit harder as investors are less confident about those companies' abilities to deliver a sufficient return on investment on their AI spending. For Amazon, increased capex levels could push its free cash flow into negative territory this year, meaning that it would need to start tapping the debt markets to raise more capital.The next big catalyst for the AI trade will be Nvidia's earnings report on Feb. 25, according to Treacy. The results will show whether the AI boom is cooling, or if Nvidia is successfully capturing the billions its biggest customers are pouring into the trade.Read: Nvidia and Oracle are flashing similar warning signs about the AI trade-Christine JiThis content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.(END) Dow Jones Newswires02-12-26 1750ET

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Amazon's stock has entered a bear market, falling over 20% from its recent high, closing at $199.60. This decline is part of a broader trend affecting Big Tech stocks due to concerns over AI spending. Microsoft also shares this fate, down 25.9%. Meta is close to bear market territory as well. Investors are shifting away from companies like Amazon and Microsoft, fearing inadequate returns on AI investments, while Alphabet's integrated tech stack offers some protection. The upcoming Nvidia earnings report on February 25 will be crucial for the AI sector's outlook.

- Big Tech stocks are facing a decline due to concerns over artificial intelligence overspending, particularly affecting Amazon and Microsoft, which have fallen into bear market territory.  
- Amazon plans to invest $200 billion in AI capital expenditures in 2026, contributing to a cumulative expected spending of $650 billion among major tech firms, leading to investor skepticism.  
- Meanwhile, Alphabet's tech stack has provided some protection against market fears, with its stock down only 9.2%, while Amazon, Microsoft, and Meta face greater scrutiny over their return on investment from AI investments.

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Amazon's stock just entered a bear market. This 'Magnificent Seven' name could be next.