Amazon Share Price Drops as Inflation Fears Drive Up Bond Yields
Amazon's share price dropped by over 2% to $260.90 on Monday as the company's AI spending bill continues to raise concerns among investors.
The decline follows a report from Reuters that renewed inflation fears have pushed the market-implied probability of a September Federal Reserve rate increase above 60%, leading to higher bond yields and increased expenses for Amazon's capital expenditures.
Amazon's second-quarter filing showed a significant increase in property and equipment purchases, with a $66.1 billion investment in AI infrastructure.
This has led to a reversal of free cash flow from an inflow of $18.2 billion to an outflow of $7.6 billion, leaving investors concerned about the company's ability to generate returns on its AI spending.