Amazon stock crashes to low not seen since 2006. What's going on?

Amazon just printed its longest losing streak in basically 20 years. The stock has fallen for nine straight trading days. Friday added another 0.4 percent drop. That matches a nine day slide that ended in July 2006.

Over this stretch, Amazon has lost 18 percent. About $463 billion in market value has been erased. Shares closed at their lowest level since May. This month alone, Amazon is down about 17 percent. That puts it on pace for its worst monthly decline since April 2022.

Investors are not confused about what triggered this. The concern is capital spending. Earlier this month, Amazon said it plans to spend $200 billion this year on data centers, advanced chips, and related equipment.

That figure was far above expectations. The scale shocked the market. The question now is simple. Can Amazon spend that much without draining cash or loading up on debt?

Amazon ramps up AI spending and investors react

The $200 billion plan is tied to artificial intelligence infrastructure. CEO Andy Jassy told investors on the Feb. 5 earnings call that heavy investment is required to meet rising demand inside AWS.

Andy said, “This isn’t some sort of quixotic top line grab.” He added, “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.”

Despite that statement, the stock kept falling. Investors fear that elevated capital expenditures could burn through reserves. They also worry about depreciation. Chips and servers lose value fast. If demand slows, Amazon could be stuck with expensive hardware that weighs on future earnings.

The spending wave is not limited to one company. The four largest tech spenders, Amazon, Alphabet, Microsoft, and Meta Platforms, have together forecast about $650 billion in capital expenditures for 2026. That number is historic. Investors are questioning whether returns will justify the scale.

AI concerns spread across tech and logistics

Pressure has hit the wider tech sector. The Nasdaq 100 Index is down 3.2 percent in February. Technology shares have sold off this year after new software built on AI models from Anthropic and OpenAI entered the market. Some investors worry that these tools could slow growth at established software firms.

The iShares Expanded Tech Software Sector ETF is down 24 percent so far in 2026. That puts it on pace for its worst year since 2022. Inflation and rising interest rates have pushed companies to trim technology budgets after heavy pandemic era spending.

Analysts have labeled the downturn in software as a service stocks a “SaaS apocalypse.” Software executives have pushed back and said their core metrics remain intact.

AWS generates revenue from long standing clients such as Adobe, Intuit, and Zillow. It has also gained business from AI model developers. In November, AWS disclosed a $38 billion spending commitment from OpenAI, which sells AI models and offers ChatGPT subscriptions.

Growth rates, however, have not accelerated. Two weeks ago, AWS customer ServiceNow reported revenue growth of 20.7 percent year over year in the fourth quarter. Two years earlier, that rate was almost 26 percent. Outside software, AI disruption fears have spread to logistics. Florida based Algorhythm Holdings said its AI product allows clients to quadruple freight volumes without increasing headcount. Shares of C.H. Robinson Worldwide were down about 23 percent in midday trading after that development.

Almost two decades after its last nine day losing streak, Amazon is again facing doubts about spending discipline. The stock chart shows the damage. The market is watching whether the $200 billion bet pays off.

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