Amazon's shares dropped sharply in after-hours trading following its earnings report. Weighed down by hefty AI investments, the company's free cash flow swung from positive to negative, with spending on AI-related property and equipment rising substantially. Capital expenditure is projected to reach $220 billion in 2026, and the market is pressing the company to prove that its AI investments can deliver returns. Over the same period, Alphabet, Google's parent company, also came under pressure after its earnings report, as investors scrutinize AI capital spending more closely. A senior official at Amazon Web Services said the company remains confident in its current capital expenditure strategy, noting that its order backlog is approaching $500 billion. Earlier, an analyst report estimated that more than $3.5 trillion in AI infrastructure investment could face impairment risk by the end of 2030, sparking market jitters. In addition, Amazon's advertising business saw a sharp slowdown in year-over-year growth. As consumers increasingly turn to AI agents for shopping, the platform has banned Meta's popular AI agent Muse, and the market continues to question Amazon's positioning in the AI agent space.