Amazon's stock dropped sharply after-hours as investors worried that massive AI spending is burning through cash faster than the business can replace it.

• AWS cloud revenue grew strongly, beating expectations and posting its fastest growth in nearly five years.
• Despite that, Amazon's spending on AI infrastructure has exploded far beyond earlier plans, and the company is now burning cash instead of generating it, a sharp reversal from a year ago.
• Amazon's CEO defended the spending and said next year's AI investment will be even higher, betting that AWS can reach huge revenue within five years.
• Amazon's revenue outlook for the holiday quarter roughly matched expectations, but rising gas prices and living costs are making U.S. shoppers more cautious going into the holiday season.
• The sell-off wasn't isolated: chipmaker Intel and Google's parent Alphabet also dropped hard on weak outlooks, dragging down tech stocks broadly.

Outlook: Investors will be watching whether AWS's growth can eventually justify the spending, but until the cash burn slows, tech stocks are likely to stay under pressure.