Amazon’s Little Dip & My Slightly Worried Face

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Right, so Amazon. AMZN. The behemoth. It’s down, has been for nine days straight. Nine. That’s… a losing streak, isn’t it? Like a bad date that just keeps going. Last time this happened, back in 2006, the stock went on a proper tear. A 128% jump. I’m not saying history repeats itself, because honestly, who trusts history? But Wall Street is getting all fluttery, whispering about undervaluation. Not a single analyst wants to be the one to sell, which, let’s be real, is rarely a sign of true conviction. They’re seeing a 43% upside. I’m seeing a potential headache. But let’s dig in, shall we?

Investors are Having a Moment About AI Spending

The Q4 results were…fine. Solid, even. Revenue up 14% to $213 billion. Advertising and cloud computing are doing the heavy lifting, as usual. E-commerce is chugging along. All good. Except… earnings were a bit… shy. And then there’s the small matter of $2.4 billion in one-time charges. Which, okay, happens. But it’s enough to make you wonder what they’re really up to. They say it’s all about the future, about AI. Which is code for “we’re throwing a ridiculous amount of money at something that might pay off.” They’re planning to spend $200 billion on capital expenditures by 2026. Two. Hundred. Billion. I mean, I lose track of what I spent on coffee last week. This is… a different scale.

Andy Jassy, bless him, is talking about “strong long-term return on invested capital.” He always sounds so… optimistic. Like he genuinely believes AI is going to solve all our problems. Or at least justify the spending. Honestly, I’m starting to suspect CEOs have a secret AI-powered optimism generator built into their brains.

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The Investment Thesis: Still Solid, But…

Look, Amazon is still a force. E-commerce, digital advertising, cloud computing – those markets are going to grow. Retail e-commerce is projected to grow 12% annually through 2030. Adtech, 14%. Cloud computing, 16% by 2033. Numbers. They’re… reassuring. Amazon is building hundreds of AI tools to optimize everything from inventory placement to last-mile delivery. It’s all very efficient. And it’s already showing up in the operating margin, which improved 1.5 percentage points in Q4. Small wins, people. Small wins.

Brian Olsavsky is talking about robotics and automation. Elevating the customer experience. It all sounds very…corporate. Meanwhile, AWS is adding AI tools at every layer of the tech stack. Custom chips, developer services, AI agents. They’re throwing everything at the wall to see what sticks. And AWS revenue is up 24%, the fastest growth in 13 quarters. Which, admittedly, is good. Very good.

Jassy is claiming their chips business is growing at a triple-digit pace. And that AWS added more data center capacity than any other company in the world in 2025. I’m starting to feel a bit dizzy. It’s a lot of data. A lot of money. A lot of… ambition.

Here’s the thing: everyone is spending on AI. It’s a race. And Amazon can’t afford to fall behind. Morgan Stanley thinks those AI investments are paying off. Which is… comforting. But it’s also a bit terrifying. What if it doesn’t pay off? What if we’re all just building a very expensive, slightly smarter version of… nothing?

Look, the nine-day losing streak feels like an overreaction. Wall Street expects earnings to increase 15% annually through 2027. That makes the current valuation of 28 times earnings look… reasonable. If you’re a patient investor, and you’re willing to take a bit of a risk, now might be a good time to buy. But honestly? I’m just going to go have a very large cup of tea and try not to think about it too much.

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2026-02-15 11:42