Amazon’s substantial capital expenditure forecast is raising eyebrows, mirroring concerns that have already surfaced around Microsoft’s significant investments. Shares of the e-commerce and cloud computing behemoth saw a sharp decline of over 11% in after-hours trading following the release of its fourth-quarter earnings, which fell short of analyst expectations.
The more significant concern, however, stems from Amazon’s projected capital expenditures of $200 billion. This figure substantially surpasses the $146.6 billion anticipated by analysts and represents a considerable jump from the approximately $131 billion spent in 2025.
This enormous outlay also overshadows Alphabet’s forecasted capital expenditure range of $175 billion to $185 billion, which had already prompted unease among investors and market watchers. The market’s reaction signals a growing apprehension about the scale of investment by major technology companies in the pursuit of the next wave of artificial intelligence advancements.
The surge in capital expenditures, coupled with worries that AI could potentially diminish the valuation of traditional software companies, contributed to a broader sell-off in the tech sector. The Nasdaq Composite index experienced a decline of 1.59%, dragged down by significant drops in Nvidia, Oracle, and Qualcomm. Further pressure on stocks came from a report indicating a substantial increase in U.S. layoffs during January. The S&P 500 fell by 1.23%, pushing it into negative territory for the year, while the Dow Jones Industrial Average retreated by 1.2%.
Despite the market downturn, some analysts view this correction as a positive development. Stephen Tuckwood, director of investments at Modern Wealth Management, suggested that the market’s retrenchment indicates a more discerning approach rather than simply irrational exuberance.
Reflecting this cautious sentiment, Bitcoin experienced a significant drop, falling to $62,736 as of 7:50 a.m. Singapore time (6:50 p.m. ET), its lowest point since November 2024. Other major cryptocurrencies, including Ether and Solana, have also seen declines this week.
Beyond market movements, political developments in Asia are also capturing attention this weekend. Japan is set to hold snap elections on Sunday, with current polls indicating a strong likelihood of Prime Minister Sanae Takaichi’s Liberal Democratic Party securing a landslide victory. Thailand will also be conducting its elections on the same day. However, global investors are likely to focus more intently on Japan, given the potential impact of Takaichi’s expansionary fiscal policies on the yen and government bonds, both of which hold considerable sway in international markets.
**Key Developments to Watch:**
* **Potential Investigations into Federal Reserve Chairs:** U.S. Treasury Secretary Scott Bessent indicated on Thursday that former President Trump would have the authority to decide on investigations into Federal Reserve chairs. This statement came in response to a question regarding whether Trump would investigate Fed Chair nominee Kevin Warsh if he did not lower interest rates.
* **Record January Layoffs:** U.S. layoffs in January reached their highest level for the start of a year since 2009, according to a report by outplacement firm Challenger, Gray & Christmas. Employers announced 108,435 layoffs for the month, marking an 118% increase compared to the same period last year and a 205% rise from December 2025.
* **Legal Action Over Weight-Loss Pill Imitation:** Pharmaceutical giant Novo Nordisk announced its intention to pursue legal action against telehealth provider Hims & Hers. This move follows Hims & Hers’ announcement of a plan to launch a lower-cost version of Novo Nordisk’s popular Wegovy weight-loss pill, priced at $49, significantly undercutting Novo Nordisk’s $149 charge for the branded medication.
* **Market Indices Face Headwinds:** The S&P 500 has registered losses for 2026, following declines on Thursday. Other major U.S. indices also saw downturns amid the broader sell-off in technology stocks. In Europe, the pan-European Stoxx 600 index fell by 1.05%. Both the Bank of England and the European Central Bank maintained their current interest rates.
* **Investment Opportunities in Software Sector:** Amidst market volatility in the software sector, Wedbush analyst Dan Ives has identified five software stocks that he believes remain strong investment opportunities.
**And Finally…**
**Gold Remains Resilient Post-Selloff, Silver Faces Uncertainty**
Following a historic sell-off in precious metals, investment banks are reinforcing their positive outlook on gold, while advising a more cautious approach to silver. Strategists at UBS view gold’s recent price movements as typical volatility within an ongoing upward trend, rather than an indication of a market top. Analysts at Goldman Sachs also maintain a bullish stance, noting, “We continue to see significant upside risk to our gold forecast of $5,400/toz by Dec 2026.”
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/17113.html
