Amazon Under Pressure Ahead of Earnings as Capital Expenditure Worries Mount

Amazon shares fell 3.4% ahead of the company’s third-quarter 2026 earnings announcement, driven by investor concerns regarding rising capital expenditures on artificial intelligence and the potential for weak returns on these investments. Pressure intensified after Alphabet reported negative free cash flow for the second consecutive quarter, fueling fears about how massive infrastructure investments might impact the cash flows of major technology companies.

Amazon expects to spend approximately $220 billion throughout 2026 to expand its artificial intelligence and cloud computing capabilities—a move that is weighing on its cash flow. This comes alongside a downward revision of the stock’s price target by Cantor Fitzgerald, as well as growing concerns regarding competition with Walmart in the e-commerce sector.