Amazon eyes longest losing streak since 2006 on Capex angst

(Bloomberg) — Amazon.com Inc. shares are on track for their longest streak of daily losses in almost 20 years, as investors continue to question how much the e-commerce and cloud-computing company spends on capital expenditures.

Shares fell 0.8% on Friday, on track for a ninth straight negative session.

Should the stock end the day in negative territory, that would represent its longest losing streak since a nine-day drop that ended in July 2006. The stock has slumped more than 18% over the latest stretch, erasing more than $470 billion in market valuation. Shares are trading at their lowest since May.

Much of the stock’s drop can be traced to results earlier this month, after Amazon said it would spend $200 billion this year on data centers, chips and other equipment — far more than had been expected.

“If Amazon is now spending so much that it has negative cash flow, that’s a major concern and a red flag, and investors are increasingly viewing it as such,” said Anthony Saglimbene, chief market strategist at Ameriprise.

Investors have become increasingly concerned about how much big tech companies are spending on artificial intelligence, and the theme also weighed on both Microsoft Corp. and Alphabet Inc. The four biggest spenders — Amazon, Alphabet, Microsoft and Meta Platforms Inc. — have together forecast capital expenditures of about $650 billion in 2026.

If these big tech companies “have negative or weaker cash flow on account of this spending, that’s a dynamic shift in how they should be valued, especially if we go through a period of market stress or AI evolves in a way that they or the market is not anticipating,” Saglimbene said.

Amazon shares are down about 17% this month, on pace for their biggest monthly percentage drop since April 2022. The Nasdaq 100 Index is down 3.2% in February.

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