Amazon shares have entered a technical correction after dropping about 11% from August’s all-time high, sliding below the 100-day moving average on a roughly 2% Tuesday decline and trailing the S&P 500 year to date with a gain of about 10% versus roughly 12% for the benchmark. The pullback reflects mounting pressure from a Federal Trade Commission case joined by 22 states that accuses Amazon of using undisclosed reserve-pricing mechanisms since 2019 to overcharge about 1.2 million advertisers by more than $20 billion, raising investor concern that the company’s lucrative advertising business could become less profitable. Regulators say a hidden soft reserve pushed Sponsored Products advertisers to pay their full bid far more often, with that share rising toward nearly 80% by 2024, while Amazon disputes harm, argues advertisers receive greater value, and cites flat inflation-adjusted click prices, large alleged advertiser savings, and relevance-weighted auction outcomes. A second overhang is aggressive AI infrastructure spending: Amazon has raised its full-year 2026 capital expenditures outlook to about $220 billion, and Evercore ISI now estimates 2027 and 2028 capex of $320 billion and $370 billion with negative free cash flow of roughly $50 billion in each year. Citi’s Ronald Josey said the firm would use any share dislocation to add exposure, pointing to sustained advertiser spend, accelerating AI demand at AWS, retail tailwinds, and expanding profitability.