Amazon shares edged up half a percentage point this week, masking mounting disquiet among individual investors over the company’s simultaneous acceptance of artificial intelligence spending and sweeping job cuts.
Social sentiment measuring across Reddit and X turned decisively negative, dropping to minus 0.15 over the past seven days—a striking departure from the modestly bullish 0.12 average the company maintained during the previous quarter. The shift leaves Amazon as an outlier among its technology megacap peers: NVIDIA, Alphabet, Meta, and Apple all retain neutral-to-positive retail enthusiasm.
Restructuring Meets AI Adoption
The sentiment deterioration accelerated following Amazon’s latest workforce reduction announcement, which targeted approximately 30,000 positions across Amazon Web Services, retail operations, Prime Video, and human resources. Chief Executive Andy Jassy characterized the cuts as a cultural realignment driven by the adoption of artificial intelligence rather than conventional cost-cutting.
A post on the r/wallstreetbets forum distilled the anxiety, accumulating nearly 2,800 upvotes and more than 400 comments within a day. Retail traders expressed concern that Amazon’s approach constitutes a fundamental departure from cyclical downsizing. Discussion participants noted the company is eliminating tens of thousands of roles while committing $35 billion to AI infrastructure—a combination that signals margin optimization at the expense of employment.
Capital Intensity Presses Cash Generation
The company’s financial profile reflects the strain of heavy investment. Capital expenditures surged 55% year-over-year to $35.1 billion in the third quarter, compressing free cash flow to $14.8 billion. Operating income growth stalled at 0.06%, although revenue climbing 13.4%, weighed down by $4.3 billion in special charges.
Amazon’s 4.1% year-to-date return trails its technology peers, with NVIDIA advancing 27.5% over the past year and Alphabet rallying 67%. Wall Street maintains conviction, with 95% of covering analysts rating the shares a buy and projecting a $295 target price—implying 26% upside from current levels.
Yet the contrast with NVIDIA is pronounced: the chip designer commands a 93% analyst buy rating backed by 67% earnings growth and profit margins exceeding 50%, more than quadruple Amazon’s 11.1% operating margin.
The disconnect between professional analyst optimism and retail investor wariness persists despite Amazon’s third-quarter earnings beat and AWS growth reaccelerating to 20%—a divergence that raises questions about whether aggressive AI investment will translate into near-term stockholder returns or further margin pressure.
