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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.

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META Analysis: The Infrastructure Arms Race — Can $70 Billion in Capex Forge a Durable AI Moat?

Meta Platforms (NASDAQ: META) stands at a defining inflection point. The company that reinvented itself from a social media giant into an AI-first infrastructure behemoth delivered $201 billion in revenue for fiscal year 2025 — a 22% leap from 2024 — while simultaneously deploying $69.7 billion in capital expenditures, nearly doubling its prior year's infrastructure spend. At $639.78 per share, META trades at a $1.61 trillion market capitalization, roughly 20% below its 52-week high of $796.25, reflecting investor unease about whether this unprecedented capex cycle will generate commensurate returns. The tension is palpable. On one hand, Meta's core advertising business continues to compound at extraordinary rates, with Q4 2025 revenue hitting $59.9 billion — a figure that would have seemed fantastical just two years ago. Operating margins remain firmly above 40%, and operating cash flow reached $115.8 billion for the full year. On the other hand, the company is now spending more on AI infrastructure annually than most nations spend on defense, raising legitimate questions about capital allocation discipline. Mark Zuckerberg's testimony in the ongoing youth social media safety trial and a fresh $65 million political spending push to protect AI development add layers of regulatory risk to an already complex picture. The critical question for investors in February 2026 is not whether Meta's advertising machine works — it demonstrably does — but whether the company's all-in bet on AI infrastructure will create the kind of compounding advantage that justifies deploying capital at this scale, or whether it will erode the very returns that made the stock attractive in the first place.

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