AMZN Analysis: The $132 Billion Capex Gamble — Why Amazon's 20% Selloff May Be Setting Up the Decade's Best Cash Flow Inflection
Amazon.com, Inc. (NASDAQ: AMZN) trades at $206.33 as of February 18, 2026 — down roughly 20% from its 52-week high of $258.60 and sitting 10.5% below its 50-day moving average of $230.46. The $2.21 trillion company just reported its fiscal year 2025 results, posting $716.9 billion in annual revenue and $77.7 billion in net income, yet the stock finds itself in its deepest correction since the 2022 bear market. The culprit isn't earnings — those are accelerating — but the staggering $131.8 billion Amazon spent on capital expenditures last year, nearly 60% more than in 2024. The market is pricing Amazon as if it's a mature retailer drowning in infrastructure costs. But beneath the surface, Amazon's operating income surged 46% year-over-year, AWS is scaling into the AI era with margins that would make most SaaS companies envious, and the advertising business is quietly approaching a $70 billion annual run rate. The Buffett headline — Berkshire Hathaway slashed its AMZN position by 77% in Q4 2025 — added near-term selling pressure, but this is a portfolio transition story at Berkshire, not a thesis-breaking signal about Amazon's fundamentals. What makes this moment compelling for individual investors is the disconnect between Amazon's accelerating profitability and its compressed valuation. At 28.8x trailing earnings and 15.4x EV/EBITDA, Amazon hasn't been this accessible on a valuation basis since the post-pandemic recalibration. The question isn't whether Amazon is a great business — it's whether the massive capex cycle will ultimately yield the cash flow inflection that would make today's entry price look like a bargain.