Amazon stock: AI spending sparks investor caution
Amazon’s (NASDAQ: AMZN) shares have slipped 9% year-to-date, raising questions about whether the company can still deliver long-term investor gains amid its massive AI-focused spending.
Earlier this month, Amazon announced plans to increase annual capital expenditures by 50% to $200 billion, largely to expand data centers supporting generative AI. While CEO Andy Jassy believes the investment will pay off, analysts and investors are wary of the risk, pointing out that such spending could limit returns to shareholders and may not guarantee boosted earnings, News.Az reports, citing foreign media.
Despite these concerns, Amazon has strategic advantages. Its cloud-based AI infrastructure positions it well against rivals like Alphabet and Microsoft, while investments in custom chip production could reduce costs. Internally, AI and robotics are helping the company improve efficiency, including automating a significant portion of warehouse operations.
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Amazon’s stock still shows long-term potential and could remain a “millionaire-maker,” though investors may want to proceed cautiously while its AI investments play out.
By Aysel Mammadzada
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