What Amazon CEO Andy Jassy said on the ‘spending plan’ that wiped more than $250 billion from Amazon’s stock in one day
Amazon stock witnessed a plunge of 11% in extended trading on February 5, erasing more than $250 billion in market value after the company introduced a $200 billion capital expenditure plan for 2026. According to a report by CNBC, this was the highest plunge among the megacap tech firms, far exceeded Wall Street expectations by over $50 billion and sparked investor concerns about the pace and scale of spending. Amazon reported spending $131 billion on property and equipment in 2025, which is up from $38 billion in 2024, underscoring the rapid escalation of investment.
Amazon CEO Andy Jassy’s defense
As per the CNBC report, on a conference call with analysts, Amazon CEO Andy Jassy defended the spending blitz and stressed on the fact that investments are important to meet the surging demand for AI compute capacity. “This isn’t some sort of quixotic, top-line grab,” Jassy said. “We have confidence that these investments will yield strong returns on invested capital. We’ve done that with our core AWS business. I think that will very much be true here as well.”Jassy further added that the capital will go towards data centers, chips and networking equipment, enabling Amazon Web Services (AWS) to scale faster. He also noted that AWS sales grew by 24% to $35.6 billion in the most recent quarter, its fastest growth in 13 quarters, but added that growth could have been higher if the company had more capacity.The cloud unit of Amazon added nearly 4 gigawatts of computing capacity in 2025 and expects to double that power by 2027, Jassy said. He described AWS’s expansion as “scrappy,” emphasising that demand is outpacing supply.Pressed on how the AI market is evolving, Jassy likened it to a “barbell” structure: AI-native labs on one side, enterprises on the other, and a middle segment of companies experimenting with applications. “That middle part of the barbell very well may end up being the largest and most durable,” he said, suggesting long-term opportunities for AWS as enterprises adopt AI for productivity and cost savings.
