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Amazon Looks Stronger Than Ever but One Number Tells a New Story

Amazon shares fell in Tuesday afternoon trading as the market weighed a recent AI-cloud rally against heavy AWS spending questions.

By Damilola Esebame, CFEI® , Edited by Laura Hohenstein

Updated Sept. 1, 2026

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Amazon.com (NASDAQ:AMZN) traded at $254.69 in Tuesday afternoon trading, with a day change of -$5.08, or -1.96%, from its previous close of $259.77. For investors keeping tabs on their financial fitness, single-session dips like this in a blue-chip name are worth monitoring but rarely signal a trend reversal on their own. The stock opened at $257.38 and has traded between $251.93 and $257.38. The pullback comes after a late-August rally tied to Amazon Web Services, Nvidia GPU capacity, and fresh analyst support for the AI-cloud buildout.

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Session turns lower

AMZN is giving back part of last week's AI-driven move after its 3.69% gain on Aug. 28. The latest session has been weaker from the start, with the open matching the $257.38 intraday high. The day's $251.93 low shows sellers pushed the stock below the current $254.69 level before bids steadied.

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AWS remains the focus

Amazon's second-quarter 2026 results put AWS at the center of the stock debate. Net sales rose 20% year over year to $200.6 billion, while AWS revenue climbed 37% to $42.2 billion. AWS operating income reached $16.6 billion, up from $10.2 billion a year earlier.

That growth rate was AWS's fastest in 18 quarters. The cloud unit also had a backlog of contracted future customer commitments of $496 billion at the end of the quarter. A backlog is business already signed but not yet recognized as revenue.

Nvidia capacity expands

The AI infrastructure story accelerated after Amazon and Nvidia (NASDAQ:NVDA) expanded their GPU partnership. AWS plans to deploy an additional 2 million Nvidia GPUs, including Blackwell Ultra, Rubin, and Rubin Ultra models, across its global infrastructure during 2027 and 2028.

AWS had already announced plans to add more than 1 million Nvidia GPUs starting in 2026, so the latest commitment would take its disclosed Nvidia GPU plans above 3 million units. GPUs are chips built to process many calculations at the same time, making them important for training and running AI models.

Analysts raised targets

Recent analyst commentary added to the late-August rally. Citizens analyst Andrew Boone raised his AWS outlook and set a $315 price target, citing AI demand from anchor customers including OpenAI and Anthropic. Evercore ISI's Mark Mahaney lifted his Amazon target to $355 from $315.

Other Wall Street coverage also described the analyst backdrop as broadly positive, with multiple Buy ratings and an average target around the low $300s. Analyst targets are not guarantees. They show how Wall Street is framing expectations as AWS growth and AI spending move higher together.

Retail and ads help

Amazon's story is not only about cloud computing. A 24/7 Wall St. valuation note highlighted advertising growth of 26% and said Amazon Business was running at a $60 billion annualized pace. Those areas matter because they can support profits while the company spends heavily on AI infrastructure.

Amazon also reported second-quarter operating income of $27.46 billion, up 43.24%. That figure shows the company entered the current AI spending cycle with strong earnings momentum. Market watchers are weighing that momentum against the cost of building more data centers and buying more chips.

Spending draws scrutiny

The main pressure point is capital spending. Second-quarter capital expenditures reached $54.21 billion, up 68.44%, as Amazon expanded cloud and AI infrastructure. Capital expenditures are big investments in assets such as data centers, chips, and networks.

Trailing 12-month free cash flow turned negative at $7.6 billion. Free cash flow is the cash left after a company covers operations and major investments. That shift helps explain why Tuesday's decline is happening even as the AWS growth story remains central to the stock.

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Bottom line

AMZN is lower in Tuesday afternoon trading despite recent enthusiasm for AWS and AI infrastructure. It's a staple holding for anyone looking to start investing in growth-oriented tech, but the stock's next narrative hinges on whether cloud growth, the Nvidia capacity buildout, advertising gains, and retail strength can offset the cash demands of the AI data center race.

This article is for informational purposes only and should not be considered investment advice.

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Author Details

Damilola Esebame, CFEI®

Damilola Esebame, CFEI®, is a financial journalist who specializes in investing and turning complex market topics into practical guidance. He grew a four-figure investment portfolio into six figures by combining long-term S&P 500 investing with carefully managed debt financing, a strategy he now writes about for readers building their own portfolios.