Amazon shares stagnate in 2026 as $25B bond deal flags AI spending fears

Amazon.com Inc. shares are flat year-to-date as AI spending concerns overshadow the stock ahead of its July 30 earnings report.

"The biggest risk isn't credit quality, it's concentration," John Fekete, head of tradeable credit at Crescent Capital, said. "If investors begin questioning the return on AI infrastructure spending, the resulting repricing could ripple through the entire bond market."

Amazon sold $25 billion of bonds earlier this month in what traders described as a cooler reception than previous offerings, according to Bloomberg. The deal came as the six largest technology companies now represent 8.6% of the duration-times-spread risk in the US high-grade corporate market, surpassing the 7.3% share of the six largest Wall Street banks, according to Barclays strategists including Dominique Toublan and Andrew Keches.

The stock's stagnation reflects a broader reckoning for Big Tech. Alphabet Inc. raised its 2026 capital spending forecast to as much as $205 billion last week, sending its shares down 7% even as it reported $119.8 billion in quarterly revenue that beat estimates. Tesla Inc. posted a 57% collapse in operating profit to $398 million, with free cash flow turning negative for the first time in two years. The four largest hyperscalers — Amazon, Alphabet, Microsoft Corp. and Meta Platforms Inc. — are now projected to spend a combined $725 billion on capital expenditures in 2026, up roughly 77% from $410 billion in 2025, according to industry estimates.

Amazon's July 30 report will be the next test of whether the AI spending cycle is generating returns. The company's cloud computing unit, Amazon Web Services, faces intensifying competition from Microsoft Azure and Google Cloud, which posted an 82% revenue surge to $24.8 billion in the latest quarter. Investors will scrutinize AWS revenue growth, overall margins and any update to Amazon's own capex guidance.

The implications extend beyond Amazon. Microsoft and Meta are scheduled to report earnings in the same week, with analysts watching their capital expenditure guidance more closely than their revenue lines. Any further upward revision to AI infrastructure spending risks extending the sell-off that erased more than $140 billion from Tesla's market value in a single session last week.

This article is for informational purposes only and does not constitute investment advice.