Editor’s note: The markets and our Chaikin Analytics offices will be closed Monday, February 16, for Presidents Day. As a result, we won’t publish our Chaikin PowerFeed e-letter that day. Look for your next issue on Tuesday, February 17.

A Major Warning for This ‘Stealth’ Tech Titan

By Ethan Goldman, junior analyst, Chaikin AnalyticsAmazon’s (AMZN) business keeps evolving…

Of course, Amazon is still the king of online retail. The company’s global retail segments still account for the bulk of revenue.

In fact, Amazon made more than $426 billion of its 2025 sales from its North America segment alone. The company’s international segment brought in nearly $162 billion in sales last year, too.

That’s an eye-popping amount of money. But out of those figures, Amazon only managed to pocket a bit more than $34 billion as income. 

Most folks probably only know Amazon for its online retail business. But the company’s main income source is its Amazon Web Services (“AWS”) cloud platform…

Now, I won’t dive into what AWS does again. But just know it’s the largest cloud-service provider in the world by market share.

This segment saw massive revenue growth in 2025. Sales in the AWS segment surged 20% year over year to nearly $129 billion.

Sure, that number is much less than the company’s North American and international sales together.

But Amazon brought in nearly $46 billion from this segment in income.

Folks, that’s roughly $11 billion more operating income than Amazon’s two retail segments combined.

So it’s easy to see why Amazon is investing so much in its high-margin AWS business. I’m talking about investments like Trainium computer chips and numerous AI models.

And yet, news of all this AI spending has hurt the company’s stock. And the Power Gauge is flashing some major warning signs right now…Recommended Links:

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Amazon Brings in More Income From Cloud Services Than Retail

Keep in mind that Amazon made a total of $80 billion in operating income in 2025. And more than half of that is thanks to AWS.

That $80 billion figure also marked nearly 17% growth in total income from the previous year.

Meanwhile, Amazon also said that it plans to spend $200 billion in capital expenditure (“capex”) in 2026. So the company is betting big that more investment in AI will boost its AWS business.

Of course, Amazon isn’t the only tech company putting a ton of money toward AI…

Last week, I shared that Google parent company Alphabet (GOOGL) plans to spend $185 billion on a similar goal.

Unfortunately for Amazon, the market didn’t appreciate this news…

The company’s stock fell more than 5% the day after the earnings release containing all those massive numbers. And it’s now down about 19% over the past month.

The Power Gauge sees this weakness…

As regular readers will recall, I first shared our system’s warning signs about Amazon on January 29.

At the time, the Power Gauge rated Amazon as “neutral.” And as I mentioned, it had flashed some warnings related to weak relative strength not long before that.

And now, the stock’s recent fall has only made matters worse…

A ‘Double Bearish’ Warning From the Power Gauge

The Power Gauge now gives Amazon a “bearish” rating. It also flagged another sell alert related to weak relative strength on February 6.

That’s the day after Amazon released its fourth-quarter and full-year earnings report for 2025.

Take a look at the chart below…I’ll also note that this is the first time the Power Gauge has rated Amazon as downright “bearish” since March 2023.

On top of all this, our earnings quality (“EQ”) filter in our system is also flashing a warning…

I mentioned this feature earlier this week when I discussed shipping giant United Parcel Service (UPS). And right now, the Power Gauge flags Amazon’s EQ as “low.”

Put simply, our system says that Amazon is having a tough time converting its earnings into cash…Of course, we saw this in Amazon’s recent annual report as well.

I won’t sugarcoat it – Amazon’s current picture in the Power Gauge isn’t good. For now, our system sees more downside ahead for the stock.

Good investing,

Ethan Goldman

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Editor’s note: We’ve seen plenty of volatility in the markets so far this year. That also goes for many big-name, popular stocks.

The Power Gauge – with features like the EQ filter – is particularly important for navigating this kind of environment. And it’s why our founder Marc Chaikin is going on camera next Tuesday for a special event…

As he’ll explain, it all relates to a chance to double your money on multiple occasions – if you understand what’s coming next to AI and other breakthrough sectors.

You won’t want to miss this big event. And it’s completely free to attend. Just save your spot for it here.

Market View

Major Indexes and Notable Sectors  # HLD:    BULLISH    NEUTRAL    BEARISHDow 30

-1.33%621 3S&P 500

-1.54%109299 89Nasdaq

-2.03%2251 27Small Caps

-2.04%606949 331Bonds

+1.33%Utilities

+1.48%127 3

— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are somewhat Bullish. Major indexes are mixed.*  *  *  *

Sector Tracker

Sector movement over the last 5 daysUtilities+4.99%Materials+4.61%Real Estate+3.98%Energy+3.39%Information Technology+2.64%Consumer Staples+2.63%Industrials+2.6%Health Care+0.75%Consumer Discretionary-1.17%Communication-1.35%Financial-3.0%*  *  *  *

Industry Focus

Telecom Services10253

Over the past 6 months, the Telecom subsector (XTL) has outperformed the S&P 500 by +27.93%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #10 of 21subsectors and has moved up 3 slots over the past week.Top StocksHLITHarmonic Inc.NTCTNetScout Systems, InVSATViasat, Inc.*  *  *  *

Top Movers

GainersEQIX+10.41%AKAM+10.35%ZBRA+8.57%MSI+7.67%EXC+6.97%LosersAPP-19.68%BAX-15.99%TYL-15.39%CHRW-14.54%EXPD-13.18%*  *  *  *

Earnings Report

Earnings SurprisesCOIN 
Coinbase Global, Inc. Q4 $-2.49 Missed by $-3.45H 
Hyatt Hotels Corporation Q4 $1.33 Beat by $0.99ALNY 
Alnylam Pharmaceuticals, Inc. Q4 $1.25 Missed by $-0.25ABNB 
Airbnb, Inc. Q4 $0.56 Missed by $-0.09TOST 
Toast, Inc. Q4 $0.27 Beat by $0.03*  *  *  *

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