Amazon Stock Slumps as AI Spending and Regulation Weigh on Earnings

Amazon's stock price has fallen sharply ahead of its July 30 earnings report due to concerns over AI spending, regulatory scrutiny, and weakening cash flow.

The company is investing heavily in AI infrastructure, which has raised questions about the sustainability of its investment-heavy strategy.

Investors are worried that Amazon's aggressive expansion into AI may not generate sufficient returns to justify the scale of investment, with free cash flow under pressure from increased capital expenditures.

Regulatory scrutiny is also adding uncertainty for investors, with a U.S. Senate committee investigating allegations involving Chinese influence on Amazon's online marketplace.