Amazon Faces Stock Drop as $100B AI Investment Raises Investor Concerns

The tech giant plans record capital expenditures for AI in 2025, but analysts question its sales forecast and cloud capacity challenges.

Amazon announced plans to spend over $100 billion on AI infrastructure in 2025, focusing on expanding its AWS cloud services.
Shares of Amazon fell 4% following a weaker-than-expected sales forecast and concerns over capacity constraints in its cloud division.
Big Tech companies, including Amazon, Google, Microsoft, and Meta, are collectively investing $325 billion in AI this year, a 46% increase from 2024.
Analysts remain optimistic about Amazon's long-term AI potential but have lowered price targets due to short-term spending concerns.
The emergence of cost-effective AI models, like those from Chinese startup DeepSeek, has intensified scrutiny of Big Tech's massive AI spending.