NEW YORK, May 19, 2026, 14:06 (EDT)
Amazon.com shares dropped around 2.3% to $258.73 Tuesday afternoon, a steeper slide than the wider indexes as traders pulled back from big tech before Nvidia’s numbers. The stock’s market cap came in near $2.81 trillion. That keeps the $3 trillion mark in sight, but it’s no longer clear the move is automatic.
That’s the key issue for Amazon right now. The stock isn’t just about online retail anymore. Investors are betting that Amazon Web Services can make AI investments pay off with steady revenue before the spending pushes them away.
Markets stayed under pressure, with the S&P 500 and Nasdaq both in the red earlier Tuesday as bond yields moved higher. AP reported that rising yields can increase borrowing costs for firms investing in new AI data centers, which tech companies have relied on for growth.
Bulls on Wall Street saw more support after Jefferies put Amazon on its “Franchise Picks” buy list and stuck with a $320 target. Analyst Brent Thill said AWS is in the “early stages of a meaningful re-acceleration” as new capacity comes available. Thill also thinks the market treats Amazon like a “mature retailer,” missing the potential from AI-powered AWS growth. Investors
Amazon’s last earnings gave bulls something. AWS revenue jumped 28% to $37.6 billion in Q1, beating forecasts. Net sales hit $181.5 billion. CEO Andy Jassy said Amazon is sticking with a $200 billion AI investment goal this year. Jesse Cohen, senior analyst at Investing.com, called AWS’s growth “the standout story.” Reuters
Alphabet kicked off Google I/O on Tuesday with AI front and center. News of a Google and Blackstone AI cloud partnership hit some cloud-computing stocks ahead of the bell. Amazon’s cloud business now faces more pressure from Google, not only Microsoft Azure.
Nvidia is still the big test. According to Reuters, options prices showed traders bracing for a $355 billion move in Nvidia’s market cap after its earnings Wednesday. Traders are looking at data-center demand, spending from hyperscalers and margins. Matt Amberson at ORATS said some may be “complacent about AI/capex,” referring to capital spending. Reuters
Amazon is working on a new project tied to Nvidia, Business Insider said Monday. The report said an internal AWS project known as “Titus” is focused on revamping data centers to handle Nvidia’s top GPU systems. Amazon has been pushing its own AI chip, Trainium, but it looks like AWS still needs to invest in Nvidia hardware. That means more spending as the company tries to keep up in AI. Business Insider
Risk is clear. Amazon’s free cash flow dropped to $1.2 billion over the last 12 months from $25.9 billion a year ago, as spending on property and equipment jumped, mostly from AI investment. If demand weakens, or if power, land and chip costs get ahead of signed customer contracts, investors could cut their view of AWS fast.
Amazon will hold Prime Day in June this year, bringing the major sales event into the current quarter for shoppers in 26 countries. The company is set to hold its virtual annual shareholder meeting on May 20 at 9:00 a.m. Pacific time.
The stock is stuck for now. Analysts remain positive on cloud and AI reacceleration, but the market is showing less interest in paying early for years of data-center investment unless returns are clearer.
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