Amazon shares fall ahead of quarterly earnings report

Amazon shares fell 3.4% in morning trading as investors positioned cautiously ahead of the company's Q3 2026 earnings report, due after the market close today. The stock dropped to a session low of $241.24, well below its 52-week high of $287.20. The decline was driven by sector-wide concerns over AI capital expenditures and returns, following Alphabet's second consecutive quarter of negative free cash flow due to rising AI infrastructure costs. Amazon raised its 2026 capex forecast to $220 billion, pushing free cash flow into negative territory, while Truist analysts warned of similar risks and Cantor Fitzgerald cut its price target. Walmart's improved membership program added competitive pressure on Amazon Prime, while the Nasdaq led broader market declines amid an AI-capex selloff. Amazon has lagged major indices year-to-date due to heavy spending and lower margins, with investors awaiting AWS growth figures to assess whether AI investments are paying off.