Amazon one-ups its rivals on capex spending, but investors are already worried over AI valuations

Amazon is following in the footsteps of fellow tech giant Microsoft, and not in a good way. Shares of the e-commerce and cloud giant plunged more than 11% in extended trading after the company reported fourth-quarter earnings that missed expectations.

The bigger jolt, however, came from Amazon’s enormous capital expenditure projection — $200 billion, far above analysts’ estimates of $146.6 billion and sharply higher than the roughly $131 billion in 2025.

That figure also dwarfs Alphabet’s projected capex range of $175 billion to $185 billion, which already gave traders and analysts pause. The message from markets was clear: Investors are growing wary of how much Big Tech is spending to chase the next phase of artificial intelligence, even as Amazon CEO Andy Jassy said he was “confident” of seeing a “strong return on invested capital.”

Soaring capex and fears that AI is eroding the value of software firms contributed to a tech sell-off on Thursday. The Nasdaq Composite fell 1.59% on declines in Nvidia, Oracle and Qualcomm, among others. Stocks were further pressured by high U.S. layoffs in January. The S&P 500 dropped 1.23%, putting it in the red for 2026, and the Dow Jones Industrial Average retreated 1.2%.

But not everyone sees a sector in trouble. Dan Ives of Wedbush Securities said in a research note on Wednesday that the sell-off reflected an “Armageddon scenario for the sector that is far from reality.” 

The market decline, however, is “a positive sign” for Stephen Tuckwood, director of investments at Modern Wealth Management, who argued that it signals “the market is discerning at this point rather than just irrational exuberance.”

Perhaps reflecting some of that discernment, Bitcoin briefly sank below $61,000 as of Thursday evening stateside, its lowest level since November 2024, though it recouped some losses and is trading at $65,208 at 2:40 p.m. Singapore (1:30 a.m. ET). Other cryptocurrencies, such as Ether and Solana, have also been losing ground this week.

In Europe, U.K. government bonds, known as gilts, could face renewed pressure as questions swirl around British Prime Minister Keir Starmer’s grip on power.

Starmer is under fire over the prior appointment of Peter Mandelson as U.K. ambassador to the U.S despite knowing of his links to the disgraced financier Jeffrey Epstein. Punters are raising their bets that Starmer could lose his leadership role by the end of the year — and the Bank of England Governor Andrew Bailey told CNBC the fiasco is adding to global uncertainty.

— CNBC’s Annie Palmer contributed to this report.

Silver’s volatility has exceeded 100%. Strategists at UBS noted the recent plunge appeared driven more by a broader risk-off move than a collapse in fundamentals, but warned that extreme volatility makes near-term positioning risky. 

India is ‘ready’ to buy Boeing planes worth up to $80 billion, India’s Commerce and Industry Minister Piyush Goyal reportedly said, signaling New Delhi’s willingness to expand trade with the U.S. Goyal also said that there was potential to buy $500 billion worth of goods from the U.S. over the next five years.

U.S. citizens should ‘leave Iran now,’ according to a security alert issued by the U.S. Virtual Embassy in Tehran on Friday. The notice comes ahead of U.S.-Iran talks in Oman on Friday, with little indication that the two sides have found common ground on the meeting’s agenda.

The S&P 500 is in negative territory for 2026, after the index posted losses on Thursday. Other major U.S. indexes also fell on a sell-off in tech stocks. Asia-Pacific markets mostly fell Friday. South Korea’s Kospi lost roughly 1.5%, paring earlier losses of as much as 5%. Japan’s Nikkei 225, however, added 0.8%.

[PRO] Is the AI bubble popping itself? The question preoccupying Wall Street this week: Is the software sell-off overdone, or does it signify the start of a bubble bursting?