Amazon Stock Under Pressure: 13% Loss in One Month Despite AWS Growth

Amazon stock (AMZN) lost 13 percent in value within one month by early July 2026. According to Motley Fool on July 5, 2026, massive capital expenditures (capex) by the company and concerns about consumer spending rattled investors.

Despite the stock decline, Amazon's business continues to grow. Net revenues increased in double-digit percentages in recent quarters. Amazon's cloud division Amazon Web Services (AWS) performed particularly strongly: in the first quarter of 2026, revenue rose 28 percent year-over-year – the fastest growth in 15 quarters, Motley Fool reported on July 2, 2026.

New Competition in Cloud Business

AWS faces new competition. According to reports, Meta is working on a cloud business to sell AI computing power. This would put the social media company in direct competition with Amazon, Microsoft Azure, and Google Cloud Platform. AWS is currently Amazon's most profitable division and drives most of the company's profits.

Cloud demand remains robust, particularly driven by the need for infrastructure for artificial intelligence. AWS benefits from companies shifting their IT systems to the cloud and increasingly deploying AI applications.

Amazon Invests in AI Chips for Consumer Devices

Amazon is developing its own AI chips for home technology and future mobile devices. David Limp, head of Amazon's Devices & Services division, presented the company's AI strategy on July 2, 2026. The new chips are intended to support the digital assistant Alexa Plus and additional AI features, according to CNET.

By developing semiconductors in-house, Amazon aims to become less dependent on external chip manufacturers and improve its devices' performance. Investments in AI hardware and cloud infrastructure burden profit margins in the short term, but are intended to strengthen competitive positioning over the long term.

Stock Price Stabilizes Slightly

On July 1, 2026, Amazon stock closed at $241.70 and rose 1.41 percent compared to the previous day, according to Zacks Investment Research. The stock performed better than the overall market on that trading day, which declined.

Year-over-year, Amazon performed solidly according to Zacks on July 1, 2026, with the stock holding its own in industry comparisons. Recent losses primarily reflect uncertainty about high capital expenditures and potential weakness in the e-commerce segment.

Outlook: High Spending Against Long-Term Opportunities

Amazon faces the challenge of reconciling high investments in AI, cloud infrastructure, and logistics with investor expectations. Capex spending weighs on profitability in the short term, while consumer spending remains under scrutiny.

Strong AWS growth shows that Amazon continues to expand in profitable business segments. The cloud division partially offsets margin pressure in the core e-commerce business. Whether investments in AI and chips generate returns in the medium term will become clear in upcoming quarters.