Amazon Stock Plunges Below $260 Amid Infrastructure Spending Concerns

Amazon's stock price has declined from $287 to below $260 after a strong earnings-driven rally. This drop raises concerns about the company's ability to sustain its aggressive expansion amidst enormous infrastructure spending, regulatory pressure, and rising expectations.

The company's reliance on AWS as its strongest growth engine is clear, with revenue jumping 37% year over year to $42.2 billion in the latest quarter, exceeding market expectations. However, investors are becoming increasingly cautious about the cost of sustaining this expansion, with Amazon committing a record-breaking $220 billion in capital expenditure for 2026.

The Federal Trade Commission (FTC) has also launched an investigation into Amazon's advertising practices, alleging that the company secretly increased minimum ad prices, potentially costing advertisers $20 billion or more. This adds to the uncertainty surrounding Amazon's future growth and profitability.