What Happened?

Shares of cloud computing and online retail behemoth Amazon (NASDAQ: AMZN) fell 7.2% in the afternoon session after the company announced a massive $200 billion capital spending plan for 2026 and reported mixed fourth-quarter results. 

The forecast, a more than 50% increase in capital expenditures compared to 2025, spooked investors who were concerned about its impact on near-term profitability and free cash flow. While Amazon's revenue beat expectations and its Amazon Web Services (AWS) segment showed strength, this was overshadowed by an operating profit miss. Adding to the negative sentiment, the company's operating profit guidance for the upcoming quarter also fell short of analysts' forecasts.

The shares closed the day at $209.79, down 6% from previous close.

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What Is The Market Telling Us

Amazon’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 1 day ago when the stock dropped 4.5% on the news that German regulators ordered the company to stop imposing price controls on its marketplace in the country and to hand over approximately $70 million in alleged unfair gains. 

Germany's Federal Cartel Office prohibited Amazon from setting price caps for third-party retailers, stating the company's methods were "based on non-transparent rules." The watchdog added that it was not clear to sellers how these price limits were determined. This negative regulatory news arrived as the company was scheduled to report its fourth-quarter results, adding to investor unease. Concerns were already present regarding Amazon's rising capital expenditures, which surged in 2025, largely driven by investments in data centers and AI infrastructure.

Amazon is down 7.4% since the beginning of the year, and at $209.83 per share, it is trading 17.4% below its 52-week high of $254 from November 2025. Investors who bought $1,000 worth of Amazon’s shares 5 years ago would now be looking at an investment worth $1,263.

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