Amazon’s Jaw-Dropping Capex Leads Mega-Cap Tech’s $630B AI Spend Plans

Wall Street is rattled as companies from Amazon to Google double down on AI capex and investors start asking when the payoff actually arrives.

• Amazon on Thursday forecast that its capex would increase by over 50% to $200 billion this year, sending its stock price plummeting despite strong results.
• Earlier, Alphabet announced that its capex would double.
• Companies argue that higher spending, mostly towards AI, is necessary to support momentum even as investors grow jittery.

Five of the biggest U.S. tech companies have projected to pour a staggering $630 billion-plus in data centers, AI development, and other capacity-enhancing expenditures this year – a figure that eclipses the GDP of countries such as Singapore or Israel, and one that is sending jitters across the market.

The 2026 capital expenditures projection is more than double what these companies spent last year. 

While firms like Meta and Alphabet have argued that AI has given a noticeable lift to their core businesses and that they must keep investing to realize the gains on the table, the aggressive pace has left many on Wall Street fretting.

Amazon stock dropped by over 11% in Thursday’s after-market session, following the company's results and capex plan disclosure. The move is similar to the post-results moves in Microsoft and Alphabet stocks earlier.

Investors, concerned about whether the high spending will deliver top- and bottom-line returns in the future, appear to be selling off tech stocks at the moment.

The Nasdaq 100 index has already declined 3.9% this week and is on track to record its worst performance since the first week of April last year. That is also due to a broad selloff in software stocks, as worries that AI will reduce demand for subscription software are taking hold.

“This software Armageddon sell-off [is] unlike anything I have seen in 25 years, “ WedBush analyst Dan Ives said on X. “The market is treating this sector and stalwarts like Salesforce and ServiceNow like they are structurally broken business models due to AI…we strongly disagree with this narrative.”

Wall Street analysts still overwhelmingly recommend buying into Big Tech stocks, according to their ratings on Koyfin. On Stocktwits, retail sentiment was ‘extremely bullish’ for Amazon and Alphabet, ‘bullish’ for Microsoft, and ‘bearish’ for Meta and Apple as of late Thursday.

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