This article first appeared on GuruFocus.
Amazon (NASDAQ:AMZN) shares fell about 4% on Thursday as investors weighed growing concerns over artificial intelligence spending and a U.S. Senate investigation into the company’s marketplace operations ahead of its second-quarter earnings report.
Amazon came under pressure after Alphabet’s (NASDAQ:GOOGL) increased capital expenditure outlook fueled broader concerns about returns on AI infrastructure investments. The decline also followed reports that the Senate Small Business Committee is investigating allegations involving Chinese influence on Amazon’s online marketplace. Bloomberg reported the committee cited evidence of potential negligence, although the allegations remain under investigation and Amazon declined to comment.
Separately, CNBC reported Amazon is reducing jobs within its artificial general intelligence unit as part of a reorganization focused on higher-priority projects.
Despite the pullback, Bank of America maintained its Buy rating and $310 price target on Amazon, citing expectations for continued AWS momentum and forecasting second-quarter revenue of about $198.8 billion. The company is scheduled to report earnings on July 30, with investors expected to focus on cloud growth, AI-related capital spending and management’s outlook.
