Wall Street has been rattled by renewed fears surrounding tech investments, triggered by Amazon’s announcement of a significant increase in capital expenditure for 2026, projected to hit $US200 billion. This represents a substantial rise from the $US130 billion allocated in 2025, driven by the company’s intensified focus on artificial intelligence. The announcement sparked a major sell-off, with Amazon shares plummeting. This drop has further intensified existing concerns about the tech sector’s prospects. Amazon is a multinational technology company focusing on e-commerce, cloud computing, digital streaming, and artificial intelligence. The increased capital expenditure is expected to affect Amazon’s profit in the March quarter.
Major tech players have experienced notable declines, including Microsoft, Nvidia, Tesla, and Meta. Australian companies are also feeling the pressure. Atlassian, a software company, saw its stock decline despite exceeding revenue expectations and raising guidance. Atlassian provides collaboration software, including project management and team communication tools. REA Group, an ASX-listed real estate classifieds company, experienced an 8% drop after missing analyst earnings expectations due to higher costs in its Australian operations.
The broader market is also showing signs of strain, with Bitcoin and other cryptocurrencies experiencing a sharp downturn. This has raised concerns about potential liquidity drying up and its impact on retail investors’ ability to support equity markets. Additionally, the spillover into private credit and private equity, particularly those with significant exposure to the software sector, is adding to the unease. The situation warrants close monitoring as these market movements indicate a potential broader instability.
