Amazon Stock: $100 Billion AI Investment Sparks Market Concern

Amazon's ambitious plans to invest approximately $100 billion in AI infrastructure this year have triggered a mixed response from investors, leading to a 3.6% decline in its stock price to $230, despite previously reaching a record high of $242.52. The technology giant's strategic decision comes as its cloud division AWS approaches capacity limits, with the company having already allocated $26.3 billion to infrastructure expansion in the previous quarter. Despite the market's cautious reaction, Amazon maintains its position as one of the world's most valuable companies with a market capitalization of $2.4 trillion.

Financial Outlook

The company's revenue forecast for the current quarter falls short of market expectations, projecting between $151 and $155.5 billion against analyst estimates of $158 billion. This conservative outlook, attributed partly to currency headwinds from a stronger dollar affecting international operations, compounds investor concerns about the substantial AI infrastructure investment. While AWS demonstrated robust growth with a 19% revenue increase to $28.8 billion in the previous quarter, experts anticipate current AI capacity constraints to ease in the latter half of the year as chip supplies and energy infrastructure improve.