Amazon’s decline reflects capex anxiety, not business weakness. The market is reacting to massive AI infrastructure spending, which depresses near-term free cash flow and raises uncertainty about returns. Investors are effectively pricing Amazon as a capital-heavy utility rather than a growth platform.

However, this pattern has occurred before. Amazon historically invests aggressively ahead of demand, builds scale advantages, then monetises later. AWS itself went through this phase before becoming the company’s main profit engine.

Today’s spending positions Amazon at the centre of AI compute, logistics automation, and data-driven commerce. If AI demand scales as expected, early infrastructure builders benefit from operating leverage and strong lock-in.


Near term, volatility may persist until returns become visible. Longer term, the investment cycle could strengthen Amazon’s moat rather than weaken it.