--- title: "Aggressive AI spending plans backfire on stock prices, Amazon plunges 12% in February, marking the worst monthly performance since the end of 2022" type: "News" locale: "en" url: "https://longbridge.com/en/news/277487552.md" description: "Amazon faces a cautious market attitude due to its aggressive AI spending plans, with its stock price plunging 12% in February, marking the worst monthly performance since December 2022. Despite Amazon's leadership in the AI field, high capital expenditures are putting pressure on cash flow and return rates. The company expects negative free cash flow in 2026, and investors are anxious about the timing of return realization" datetime: "2026-03-02T15:03:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/277487552.md) - [en](https://longbridge.com/en/news/277487552.md) - [zh-HK](https://longbridge.com/zh-HK/news/277487552.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/277487552.md) | [繁體中文](https://longbridge.com/zh-HK/news/277487552.md) # Aggressive AI spending plans backfire on stock prices, Amazon plunges 12% in February, marking the worst monthly performance since the end of 2022 According to Zhitong Finance APP, Amazon (AMZN.US) is leading in the artificial intelligence race, but the market is increasingly unwilling to pay the high costs required to maintain this advantage. Influenced by Wall Street's cautious attitude towards its aggressive AI spending plans, Amazon's stock price fell 12% in February, marking its worst monthly performance since December 2022. It not only became the weakest performer among the "seven tech giants," but also ranked among the companies with the largest declines in the S&P 500 index. Since the beginning of 2025, the stock has only increased by 5.2%, also the lowest among the seven giants. ![WeChat Screenshot_20260302095200.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260302/1772463147417184.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Market concerns are primarily focused on the rapid expansion of capital expenditures eroding cash flow and returns. Amazon previously announced that it would invest up to $200 billion this year in data centers, chips, and other equipment, a scale far exceeding market expectations, which has dragged down its operating profit guidance. Amazon Web Services (AWS) recorded its fastest quarterly growth in over three years, but this still fails to mask the reality of profit prospects being suppressed by spending. According to data, the company's free cash flow is expected to be negative $524 million in 2026, marking the first negative value since 2022, while this metric was still $7.7 billion in 2025. Last Friday, Amazon announced it would invest $50 billion in OpenAI, while OpenAI is also expected to spend an additional $100 billion under its cooperation agreement with AWS over the next eight years. This "circular investment" model further reinforces the company's commitment to betting on AI infrastructure, but it also intensifies investors' anxiety about the timing of returns. The company's return on invested capital (ROIC) for the fourth quarter was 12.4%, significantly down from the previous two quarters' peak of 14.8%. ![WeChat Screenshot_20260302095211.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260302/1772463161211364.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) In the broader market environment, the high capital expenditures of large tech companies are also under scrutiny. Microsoft (MSFT.US) faced pressure on its stock price after disclosing a significant increase in capital expenditures, while CoreWeave (CRWV.US) plummeted due to raising its capital expenditure targets and announcing larger losses. The shift in investor sentiment reflects a diminishing patience for the "burning money for growth" model. However, from a valuation perspective, Amazon's current expected price-to-earnings ratio of about 22 times is significantly lower than the average of 50 times over the past 20 years and is close to its historical maximum discount range relative to the Nasdaq 100 index, even far below Walmart's (WMT.US) valuation level of over 43 times. Despite the company recently surpassing Walmart to become the highest revenue-generating enterprise globally, its stock performance has not reflected this scale advantage Wall Street remains confident in Amazon's prospects. Data shows that among the 83 analysts covering the stock, 78 have given a "buy" rating, with no one recommending a sell, and the average 12-month target price is $282.65, indicating about a 35% upside from the current stock price. Some analysts believe that the collaboration with OpenAI will bring sustained demand for AWS, while the company's self-developed Trainium chips and long-term investment in Anthropic also support its AI ecosystem layout. Additionally, Amazon is accelerating the application of robotic technology in warehousing and logistics, which is expected to enhance efficiency and improve long-term profitability. Although the high short-term investment puts pressure on financial metrics, supporters believe the company still has the ability to flexibly adjust its pace based on investment outcomes. Some fund managers point out that Amazon may be one of the "most cost-effective" targets among the seven giants, achieving a relatively balanced position between growth rate, valuation level, and strategic layout. 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