Amazon Faces Dual Headwinds as AI Spending Rises and European Scrutiny Intensifies

The week is ending with renewed pressure on Amazon shares as investors weigh a colossal push into AI with mounting regulatory noise from Europe. The questions on traders? minds: is the company stretching itself too thin with aggressive spending?

Daiwa Securities trims price target; still a Buy

The latest shift in sentiment stems from a fresh target revision by Daiwa Securities. On February 12, they lowered their price objective to 280 U.S. dollars from 300, though they still maintain a Buy rating. The core concern centers on execution risk embedded in Amazon?s expansive investment plan: the company aims to allocate roughly 200 billion dollars in capital expenditures for 2026, with a primary focus on AI infrastructure.

Investors are sizing up how this level of outlay could affect capital efficiency. AWS posted a 24% rise in the fourth quarter of 2025, yet there is lingering fear that such heavy spending could weigh on free cash flow. The market?s nerves were evident in unusually brisk trading that day, with Thursday?s volume running about 70% above the three-month average.

Regulatory jitters in Italy add to the unease

Beyond costs, regulatory developments keep the stock in the spotlight. Reports indicate that Italy?s Guardia di Finanza conducted searches at Amazon?s offices in Milan. The intrusion into European operations injects further uncertainty into the company?s regional business and contributed to a decline, with the shares finishing down 2.20% at $199.60 on the session.

Nevertheless, leadership presses ahead with expansion

Despite the cost debate and regulatory headwinds, management continues to advance several strategic initiatives:
- Strategic stake: Amazon acquired a 5.3% interest in Beta Technologies, an electric aircraft company.
- Project Kuiper: The U.S. Federal Communications Commission approved the deployment of 4,500 additional satellites to support the broadband initiative.

Market context and outlook

The stock pullback aligns with a broader softening in the tech sector as investors pull back from capital-intensive AI bets. Even so, sentiment signals remain positive on the longer horizon: the consensus price target sits around 288.60 dollars, a level that still sits well above current prices and reflects ongoing confidence in Amazon?s strategic direction despite near-term headwinds.