"The Damage Report Amazon closed at $199.60 on February 12th, down 13.5% year-to-date and 17.7% over the past month. The stock peaked at $258.60 within the last 52 weeks, meaning it has fallen roughly 23% from that high. The decline accelerated sharply in early February, with the stock's RSI dropping to 23.46, deep into oversold territory and the lowest reading since the 2022 bear market."
"The real issue is capital expenditure. Big Tech is projected to spend nearly $700 billion on AI-driven infrastructure, and investors are questioning the return. Microsoft's capex rose 66% year-over-year to $37.5 billion, far outpacing Azure's 38% revenue growth. Amazon announced a $200 billion capex plan for 2026, raising concerns about free cash flow conversion. Further, Microsoft is stuck in a prisoner's dilemma where Wall Street is looking for stronger Azure growth, but its compute constrained and needs to allocate supply to its internal products."
Amazon and Microsoft have both fallen more than 20% from their 52-week highs and entered bear market territory. Amazon closed at $199.60 on February 12, down 13.5% year-to-date and roughly 23% from its 52-week peak, with RSI at 23.46 indicating oversold conditions. Microsoft closed at $401.84, down 16.9% year-to-date and about 27% from its 52-week high, with RSI at 32.55. Both companies met or beat recent earnings estimates, but heavy AI-driven capital expenditures—projected near $700 billion across Big Tech—are raising investor concerns about free cash flow and growth conversion.
Read at 24/7 Wall St.
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