New York, February 18, 2026, 10:15 a.m. ET — Regular session
- Amazon stock jumped early after Morgan Stanley tagged it as a Top Pick.
- Amazon’s heavy bets on AI and data centers have investors working to figure out the impact on its cash flow.
- Investors are eyeing Federal Reserve minutes set for release later Wednesday—these could shift rate expectations and put fresh pressure on megacap tech valuations.
Amazon.com climbed roughly 2% Wednesday after Morgan Stanley tapped the e-commerce and cloud titan as its Top Pick, arguing the company is an overlooked beneficiary of generative AI—software that produces everything from text to code. Shares advanced $3.94 to $205.09. Analyst Brian Nowak reiterated an Overweight rating and a $300 target, saying he remains positive “through this uncertainty” tied to AI investment returns. Investing
Amazon is getting new heat from investors over capital spending. The company still plans to pour around $200 billion into 2026 capex, even as free cash flow over the past year dropped to $11.2 billion. The main culprit: property and equipment purchases soared by $50.7 billion, much of it tied to AI.
The stock’s already feeling the heat. Amazon dropped 9% on Feb. 6 after detailing its $200 billion investment plan—a move that brought back memories of the dot-com buildout, and set off fresh doubts about when, or if, such spending will pay off. Reuters noted Microsoft and Alphabet, Amazon’s top cloud competitors, also took a hit post-earnings as investors started scrutinizing AI expenses more closely.
New portfolio disclosures revealed major players dialing back their bets on the “Magnificent 7” names powering the AI rally. Tiger Global reduced its Amazon holding by 9.35%, leaving it with 10 million shares. Berkshire Hathaway, for its part, unloaded 77% of its 10-million-share Amazon stake during the fourth quarter, according to the filings. Reuters
Stocks in the U.S. started the day in positive territory Wednesday. The Dow edged up 0.08%, the S&P 500 was ahead by 0.18%, and the Nasdaq added 0.23%.
UBS has bumped up its 2026 projection for U.S. tech investment-grade bond issuance, raising the number to $360 billion from the previous $300 billion estimate. The bank highlighted stepped-up capital spending at megacaps like Amazon as the main reason. Total outlays by “hyperscalers”—the largest cloud players—might hit $770 billion in 2026, UBS noted, adding that U.S. tech companies will be seeking funding sources worldwide to cover those capex needs. Reuters
Amazon Web Services rolled out a pair of federal credit initiatives worth as much as $100 million from 2026 to 2028, targeting U.S. agencies and national labs looking to develop projects on AWS’s cloud platform and leverage generative AI.
Traders are zeroed in on a few things: the pace of AWS capacity expansion, if AI tools drive up demand without squeezing margins, and whether retail plus advertising growth can balance out the rising investment. A whiff of a major AI shopping partnership would almost certainly draw a reaction.
Still, the risks are clear. Should data-center expansion stall—or if rivals push Amazon into lowering cloud prices—the company might fall short of delivering the cash returns investors expect, especially as spending remains high.
Traders are eyeing the Federal Reserve’s policy minutes, due out at 2 p.m. EST this Wednesday. These details could sway where markets see rates heading and, by extension, impact heavyweight tech names like Amazon.
