Amazon reports Q4 earnings Thursday, capping a tech earnings season dominated by a single question: whether the industry's AI spending binge will ultimately be worth it.

Nearly $240bn has been wiped off the value of Amazon in a sign that investors have become anxious at the eye watering sums being spent by Wall Street on AI.

One day after Alphabet (GOOG) (GOOGL) said it would spend between $175B and $185B on capital spending in 2026, Amazon (AMZN) said, “Hold my beer.” The e-commerce and tech giant said it would spend $200B in 2026,

Amazon's AI opportunities won't play out overnight, but Wall Street analysts estimate the company can grow earnings by nearly 18% annually over the long term. The stock trades at a price-to-earnings ratio of just under 34 today, which is very reasonable given the anticipated growth.

Live Updates Amazon Shares Down 14% After Earnings - Is the Market Overreacting? 3 hours ago Microsoft saw its worst day since the Covid crisis just days ago, and now Amazon is seeing a similar reaction.

UPS is doubling down on reducing its relationship with Amazon.

Amazon shares slumped as much as 10 per cent on Thursday after it announced plans to spend $200bn on capital expenditure in 2026, roughly a third more than Wall Street had forecast, as it increases its bet on AI.