Amazon Drops 11% From August High as $20 Billion FTC Ad Suit Fuels AI Spending Fears
Updated
Updated · Yahoo Finance · Sep 2
Amazon Drops 11% From August High as $20 Billion FTC Ad Suit Fuels AI Spending Fears
3 articles · Updated · Yahoo Finance · Sep 2
Summary
Amazon shares fell 2% Tuesday, closing below their 100-day moving average and extending the stock’s slide to about 11% from August’s record high.
The pullback accelerated after the FTC and 22 states sued, alleging Amazon’s ad practices overcharged roughly 1.2 million advertisers by $20 billion since 2019 through undisclosed reserve pricing.
Advertising is a key profit engine, and investors fear the case could curb future margins even as Amazon says advertisers get greater value from its platform.
AI spending is adding pressure: Amazon recently lifted 2026 capital expenditures to about $220 billion, while Evercore estimates $320 billion in 2027 and $370 billion in 2028, implying roughly $50 billion of negative free cash flow in each year.
The selloff has left Amazon lagging the broader market this year, up 10% versus a 12% gain for the S&P 500, despite bullish calls that AWS AI demand and retail trends remain strong.