Major technology companies saw their stock prices fluctuate wildly following recent earnings reports, with Amazon, Microsoft, Nvidia, Meta, Alphabet, and Oracle losing a combined US$1 trillion in market value this week.
The massive sell-off reflects growing investor concern over excessive spending on artificial intelligence (AI). Amazon led the decline after announcing that its capital expenditure for 2026 would reach a staggering US$200 billion.
The figure, which far exceeded analyst expectations, triggered alarms over a potential AI bubble. Amazon’s shares fell over 5 percent on Friday, culminating in a 12 percent weekly drop, its worst performance since 2022.
Reports indicate that the combined spending of Amazon, Alphabet, Microsoft, and Meta is projected to exceed US$6600 billion in 2026. This amount surpasses the annual GDP of nations such as Singapore, the United Arab Emirates, and Israel.
Paul Markham, investment director at GAM Investment, noted that concerns regarding the ultimate returns on capital expenditure for large language models (LLM) and potential overcapacity would persist.
In response to the massive spending plans and concerns that AWS might be losing its competitive edge to Microsoft and Alphabet, D.A. Davidson downgraded Amazon’s stock from “Buy” to “Neutral” on Friday.
In contrast, Apple outperformed its peers this week with a 7 percent share price increase. Investors favored Apple’s more conservative AI strategy and lower capital expenditure, coupled with stronger-than-expected iPhone demand described by CEO Tim Cook as “amazing.”
