Is Amazon Still a Millionaire-Maker Stock?

With shares down 9% year to date, Amazon’s (AMZN +1.00%) recent artificial intelligence (AI)- and efficiency-led rally seems to have sputtered out. Despite the company’s solid performance, investors are becoming nervous about management’s spending levels and the overall health of the AI industry.

Let’s discuss whether or not these fears are merited and decide if the stock still has long-term millionaire-maker potential.

Image source: Getty Images.

What is behind Amazon’s recent decline?

Earlier this month, Amazon announced plans to increase its annual capital expenditures by 50% to $200 billion – a figure that far exceeded analysts’ expectations. Most of the money will go toward building out the data centers needed to support generative AI workloads. And while CEO Andy Jassy is confident that the company will see a return on all this spending, many on Wall Street are skeptical.

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NASDAQ: AMZN

Amazon

Today’s Change

(1.00%) $2.08

Current Price

$210.64

Key Data Points

Market Cap

$2.3T

Day’s Range

$208.94 - $211.59

52wk Range

$161.38 - $258.60

Volume

1.7M

Avg Vol

47M

Gross Margin

50.29%

The company’s shares plunged 11% on the day of the announcement and remained around 17% off from an all-time high of $254 reached in November. The reason for the pessimism is simple: This level of spending is risky for stock price performance because it has an opportunity cost. The money could be invested in other business ventures or simply returned to Amazon’s shareholders through dividends or buybacks.

Unlike a buyback, AI data center spending is not guaranteed to increase the company’s earnings or cash flow. Furthermore, it could simply fail if the market for AI-related services doesn’t grow as fast as expected.

Failure would manifest as years or even decades of depreciation expense that isn’t offset by boosted earnings growth. The risk is intensified because data center graphics processing units (GPUs) don’t necessarily have a long shelf life, with industry experts putting their lifespan at around six years before they become outdated or worn out.

Amazon’s ballooning capital expenditure budget is alarming when considering the company generated $80 billion in operating income in the entire full year 2025. That comparison gives a sense of how much growth will be needed to make the investments worth it. Meanwhile, the generative AI industry is far from a cash cow – industry leaders like OpenAI and Anthropic are expected to lose billions in the coming years.

Is there a silver lining to the situation?

The good news is that Amazon’s focus on cloud-based AI infrastructure shields it from some of the challenges faced in the market for large language models (LLMs) themselves. And it can be argued that, as a leading cloud computing company, the company has no choice but to spend huge sums on its data center build-out if it wants to maintain market share and avoid seeding ground to rivals like **Alphabet **or Microsoft.

Amazon also isn’t becoming overly reliant on third-party hardware suppliers. While it does get a portion of its chips from Nvidia, it is also investing heavily in its own custom chip production, which can help bring down its data center costs and reduce LLM training costs for its clients.

Investors should also be excited about Amazon’s ability to incorporate AI and robotics into its internal operations to boost efficiency. This year, the company has eliminated 16,000 roles, and a New York Times report suggests AI and robotics could help it potentially automate 75% of its warehouse operations over the coming years.

Is Amazon stock still a millionaire-maker?

Amazon’s colossal data center spending shows no sign of stopping anytime soon. And this uncertainty could understandably drag down its stock performance until Wall Street gets more clarity on when it will pay off.

That said, Amazon’s leadership has a track record of responsible cost management. And we have yet to see the full positive impacts of its integration of AI into internal operations to drive efficiency gains. The stock still looks like a long-term winner and a potential millionaire maker, even if investors may want to tread carefully for now.