The $450 billion question: Can Amazon’s AI gamble justify historic market carnage?
Amazon’s stock rebounded slightly after a historic nine-day losing streak that erased over $450 billion in market value, triggered by a massive $200 billion spending plan for 2024.
The unprecedented capital expenditure, a 60% surge from 2023, is primarily for artificial intelligence infrastructure, sparking investor fears over severely reduced free cash flow.
This aggressive spending marks a strategic crossroads, forcing Amazon into a “prove it” moment where it must demonstrate that AI investments will yield strong returns to justify the risk.
The financial gamble occurs alongside an aggressive internal shift, including cutting 30,000 jobs to reverse “pandemic-era overhiring,” creating a stark contrast between cost-cutting and massive investment.
The market’s reaction represents a referendum on investor patience, questioning whether Amazon’s AI bet is a visionary investment for future dominance or a perilous diversion of capital.
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