NEW YORK: Amazon shares slid sharply this week as a pullback in large technology and software stocks erased about $1 trillion in market value from the S&P 500 software and services group since Jan. 28, according to index calculations. The sell-off followed a series of earnings updates in which major companies outlined steep increases in spending for artificial intelligence data centers, chips and related infrastructure.
Amazon outlined capital expenditures of about $200 billion for 2026, up from $131 billion in 2025, as it expands computing capacity for Amazon Web Services and other operations. The stock fell 5.6% on Friday, underperforming broader indexes that rebounded from earlier losses. Amazon’s move weighed on sentiment across mega-cap technology shares after similar spending plans drew scrutiny during the week.
The spending totals from the largest platforms are among the biggest corporate investment programs on record. Alphabet said capital spending in 2026 could reach about $185 billion, and Meta Platforms said its 2026 capital expenditures could be as high as $135 billion. Together with Microsoft, the four companies are projected to invest more than $630 billion in 2026, based on their latest guidance and published estimates.
Cloud results highlighted both the scale and the competitive intensity of the AI buildout. AWS revenue rose 24% year over year to $35.6 billion in the December quarter. Microsoft said Azure revenue grew 39% in the same period, and Google Cloud revenue increased 48% to $17.75 billion, underscoring the rapid pace of growth in AI-related workloads and the heavy infrastructure required to support them.
AI spending surge jolts market leadership
U.S. stocks rallied on Friday, with technology shares rebounding even as Amazon continued to fall. The Dow Jones Industrial Average jumped 1,206.95 points to 50,115.67, closing above 50,000 for the first time. The S&P 500 rose 2.0% to 6,932.30, and the Nasdaq Composite gained 2.2% to 23,031.21, while the Russell 2000 climbed 3.6% to 2,670.34.
Even after Friday’s rebound, the week showed a shift in market performance. The Nasdaq ended the week down 1.8% and the S&P 500 finished slightly lower, while the Dow gained 2.5%. The S&P 500 software and services index fell nearly 8% for the week and has shed about $1 trillion in market value since Jan. 28, reflecting declines in a range of software, data and IT services names tied to the AI cycle.
Software stocks feel the impact
Chipmakers led gains in Friday’s rally. Nvidia rose 7.9% in the session, helping lift the Nasdaq after several days of declines. The move came as investors repositioned following earnings-driven swings across AI-linked companies, with trading volumes elevated in several mega-cap names and in semiconductor shares tied to data-center demand.
The week’s moves left markets focused on the immediate financial impact of higher capital spending and on the pace of revenue growth in cloud services. Amazon’s AWS remains the largest cloud platform by revenue, and the company’s latest results showed continued expansion alongside a significant increase in planned investment. Similar dynamics played out across peers as updated guidance and quarterly results reset expectations for 2026 spending levels. – By Content Syndication Services.