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🗞️ Amazon Spooks Wall Street
PLUS: Tech sell-off intensifies
Market Performance
S&P 500: 6,798.40 ⬇️ 1.23%
Nasdaq: 22,540.59 ⬇️ 1.59%
Dow Jones: 48,908.72 ⬆️ 1.20%
Amazon's $200B AI Bet Shakes Wall Street
Amazon shares crashed over 10% after unveiling plans to spend a staggering $200 billion on capital expenditures in 2026—far exceeding Wall Street's $146.6 billion estimate.
While the company posted solid Q4 results with revenue of $213.39 billion and AWS growing at its fastest pace in 13 quarters (24% growth), investors balked at the astronomical spending pledge.
CEO Andy Jassy justified the investment, citing "very high demand" for both core and AI workloads at AWS, where the company is "monetizing capacity as fast as we can install it."
The spending will predominantly fuel data centers, AI infrastructure, chips, robotics, and low-earth orbit satellites.
Amazon joins fellow tech giants Alphabet ($175-185B) and Meta ($115-135B) in an unprecedented AI infrastructure arms race.
The mixed earnings—$1.95 EPS vs. $1.97 expected—combined with aggressive capex plans and ongoing layoffs (16,000 corporate employees), painted a concerning picture for investors already jittery about tech valuations.
AMZN stock has a Ziggma score of 82, driven by profitability and financial health, but severely penalized by a valuation score of 26, thanks to a forward free cash flow yield of 100x.
Our Takeaway
Amazon is betting the farm on AI dominance, but Wall Street wants profits today, not promises tomorrow.
With AWS leading the cloud wars and advertising revenue up 23%, the fundamentals remain strong—but investors must stomach short-term pain for long-term AI supremacy.
➡️ FREE ZIGGMA RESEARCH: Nvidia (NVDA Stock): 60%+ Earnings Growth, AI Dominance, and a Profound Impact Edge 🔖 Read for free on Substack 🎧 Listen to podcast
Market Overview 📈
Thursday delivered another brutal session as risk-off sentiment gripped markets, with technology stocks and Bitcoin leading the carnage.
The selloff intensified concerns about an AI bubble, labor market weakness, and the sustainability of Big Tech's spending spree.
Bitcoin plunged below $70,000 for the first time since November 2024, ultimately sinking to $63,000, while silver collapsed 16% as precious metals pressure resumed.
The VIX volatility index spiked to 21.77—its highest since November—as investor confidence evaporated.
Labor market data added fuel to the fire. Challenger, Gray & Christmas reported 108,435 layoffs in January, the highest January total since the 2009 financial crisis.
Initial jobless claims jumped to 231,000 (vs. 212,000 expected), while job openings plummeted to 6.54 million—the lowest since September 2020.
The ratio of job openings to unemployed workers fell to 0.87:1, signaling a dramatic shift from pandemic-era labor tightness.
Fed Governor Lisa Cook acknowledged that inflation progress "essentially stalled in 2025," with core PCE at 3%—well above the 2% target.
The combination of weakening labor data and persistent inflation has markets pricing in potential rate cuts by March or April.
Stock Moves Deciphered 📈
💰 Alphabet (GOOGL)
Alphabet shares dipped 0.5% despite beating earnings estimates, as investors recoiled from the company's projected 2026 capital expenditures of up to $185 billion.
The "Magnificent Seven" member announced aggressive AI infrastructure spending, spooking markets already concerned about tech valuations.
🎤 Qualcomm (QCOM)
Qualcomm plummeted over 8% after delivering a disappointing forecast hampered by a global memory shortage.
The chipmaker expects fiscal Q2 adjusted earnings of $2.45-$2.65 per share on revenue of $10.2-$11 billion, missing analyst expectations of $11.11 billion in sales.
Bank of America downgraded the stock to neutral with a reduced price target of $155 (down from $215), citing a 15% decline in handset market unit volume, share losses at Samsung (25%), and expected declines at Apple.
💄Estée Lauder (EL)
Estée Lauder crashed 19% despite beating Q2 earnings expectations with adjusted EPS of $0.89 versus $0.84 estimated.
Revenue of $4.23 billion met expectations, but investors focused on the company's disappointing full-year profit guidance of $2.05-$2.25 per share, which is in line with the $2.16 consensus but signals limited upside.
The cosmetics giant faces persistent headwinds in key markets, overshadowing its recent return to organic sales growth.
Headlines You Can't Miss 👀
💊 Novo Nordisk and Eli Lilly plunged 7% and 6%, respectively, after Hims & Hers announced a $49 generic version of Wegovy, undercutting Novo's $149 branded pill.
🏪 Bob's Discount Furniture surged 11% in its NYSE debut after raising $330 million in its IPO priced at $17 per share, though gains moderated to 2% by close.
🚗 Uber was upgraded to outperform by Citizens Bank, with a $100 price target (35% upside), despite recent weakness stemming from competition concerns, including Tesla's robotaxi ambitions.
💳 Corpay jumped 10% after beating earnings and raising guidance, with Wolfe Research citing greater deal synergies and lower interest expenses as catalysts.
💼 Microsoft saw retail traders buying the dip after its 10% post-earnings decline on disappointing cloud growth, according to JPMorgan tracking data.
🥈 iShares Silver Trust (SLV) fell below its 50-day moving average for the first time since August 19, plunging 15.77% amid a broader precious metals selloff.
📊 Russell 2000 dropped 2% to slide into negative territory for the week, though the small-cap index still outperforms the S&P 500 in 2026 (+3% vs. -0.7%).
Trending Stocks 📊
🚴 Peloton (PTON)
Peloton shares plunged 25.72% after posting a disastrous holiday quarter that missed on both revenue and earnings.
The connected fitness company reported Q2 revenue well below its own internal targets, as consumers rejected higher subscription prices and its new AI-driven product lineup failed to gain traction.
Forward guidance disappointed further, with Q3 revenue forecast at $605-625 million versus $638 million expected, signaling continued weakness ahead.
₿ MicroStrategy (MSTR)
MicroStrategy tumbled after reporting a staggering $12.4 billion Q4 loss driven by Bitcoin's collapse.
As the largest corporate Bitcoin holder, the company's stock remains heavily correlated with cryptocurrency volatility.
With Bitcoin falling below $64,000, MicroStrategy's leveraged bet on digital assets continues to punish shareholders, raising questions about the sustainability of its Bitcoin accumulation strategy.
🤖 Ciena (CIEN)
Ciena stock fell marginally after S&P Dow Jones Indices announced the networking systems provider will join the S&P 500, replacing Dayforce following its $12.3 billion acquisition by Thoma Bravo.
The index addition takes effect before the bell on February 9, typically leading to increased institutional ownership and liquidity as index funds rebalance their portfolios.
What’s Next?
Key market and macro news 👇
💸 Michigan Consumer Sentiment Final expected at 55.0 versus the previous 56.4. This key consumer confidence indicator reflects personal finances and expectations for purchasing power, influencing market direction.
🎤 U.S. President Trump will deliver a speech at 7:00 PM ET. Policy announcements regarding tariffs, trade, regulation, or economic stimulus could significantly impact market sentiment across multiple sectors.
💰 Consumer Credit expected at $9.00B versus previous $4.23B. Changes in consumer borrowing patterns reflect consumer confidence and spending trends, affecting the retail, automotive, and financial services sectors.
Chart of the Day
Source: App Economy Insights
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