Amazon's $251 stock hits lowest valuation ever as AI peers soar

Amazon's stock has been left behind in the renewed interest in owning AI stocks, but the article points to two specific drags. The first is an early September lawsuit from the Federal Trade Commission and 22 states, which alleges Amazon's advertising practices overcharged roughly 1.2 million advertisers by $20 billion from 2019 to the present. Amazon responded that advertisers are receiving greater value from its platform, but investors appear to be taking a wait-and-see approach, fearing that advertising — a lucrative profit center — may become less lucrative in the future.

The second drag is spending. Amazon announced in its second quarter earnings release that it is significantly expanding its full-year 2026 capital expenditures budget to approximately $220 billion, and Wall Street expects the aggressive spending to continue. Evercore ISI analyst Mark Mahaney now estimates 2027 capex at $320 billion and 2028 capex at $370 billion, with negative free cash flow of approximately -$50 billion in each of those years.

The stakes hinge on whether the FTC case materially threatens Amazon's advertising profits and whether the market continues to tolerate massive AI infrastructure spending without near-term returns. For Amazon shareholders, the question is whether the lowest-ever valuation as a public company signals a buying opportunity or a lasting re-rating as the company's cash generation comes under pressure.