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Barchart
Anushka Dutta

Should You Buy the Post-Earnings Dip in Amazon Stock?

Amazon AWS

E-commerce leader Amazon.com (AMZN) saw its stock drop 5.6% intraday on Feb. 6 after reporting its fourth-quarter earnings on Feb. 5. The reason for this post-earnings dip was due to the company’s increasing CapEx, which is expected to climb to $200 billion in 2026, as Amazon scales its artificial intelligence (AI) aspirations. 

However, the AI boom is at risk of becoming a bubble, raising concern among investors that it's about to burst. Amazon has already shed about $300 billion in market capitalization as investors have reacted pessimistically to rising AI costs. Analysts at D.A. Davidson downgraded the stock to “Neutral” post the earnings release, citing concerns related to its spending plans and the potential for AI to erode its retail business.

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