Amazon.com (AMZN) shares fell more than 4% on Monday during a broad technology sector sell-off. Investors sold off shares due to rising concerns over massive capital expenditures for artificial intelligence infrastructure. Major tech firms including Amazon, Alphabet, Microsoft, and Meta all recorded significant declines.
The market is questioning the timeline for generating returns on these heavy AI investments. Aggregate capital expenditure for major cloud providers is projected to exceed $452 billion by 2026.
Amazon's trailing free cash flow dropped 95% following increased spending. This figure now stands at $1.2 billion. This cash flow deterioration has amplified investor worries regarding future profitability.