Key Points
Amazon’s stock is down amid Wall Street fears of a large capital-spending cycle in 2026.
This happened to the business before in the COVID-19 pandemic and led to long-term earnings and cash-flow growth.
The stock looks cheap for investors who have a multiyear time horizon.
Investors know Amazon(NASDAQ: AMZN) as one of the best-performing stocks of the 21st century. However, the trillion-dollar technology giant has actually severely underperformed the stock market indexes in recent years. Amazon stock is up just 22% cumulatively in the last five years, while the S&P 500 index has produced a total return level of 87%.
After its fourth-quarter earnings report earlier this month, Wall Street has soured on the e-commerce and cloud computing giant once again. Why? Because of its ambitious capital spending plans, which could have the business burning free cash flow in 2026.
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