Amazon shares have entered a technical correction, falling about 11% from August's all-time high and closing below their 100-day moving average after a 2% decline on Tuesday. The stock has underperformed the S&P 500 this year, rising 10% versus the benchmark's 12% gain. The pullback follows a lawsuit filed by the Federal Trade Commission and 22 states alleging Amazon's advertising practices overcharged advertisers by over $20 billion since 2019, though Amazon disputes the claim. Investors are also concerned about Amazon's aggressive AI infrastructure spending, with the company planning to expand its 2026 capital expenditures to approximately $220 billion, and Evercore ISI analyst Mark Mahaney estimating 2027 and 2028 capex at $320 billion and $370 billion respectively, leading to negative free cash flow of about $50 billion in each of those years. Citi analyst Ronald Josey, however, recommends taking advantage of any share dislocation, citing accelerating AI demand at AWS and continued retail tailwinds.
Amazon.com IncFTC lawsuit alleges advertising overcharges, plus AI spending fears weigh on stock.
Citigroup Inc.
Evercore Partners Inc