Amazon's stock fell over 11% on August 2nd after forecasting Q3 sales and operating income slightly below expectations. 

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Despite beating Q2 earnings estimates by 20% with an EPS of $1.26 and generating $148 billion in revenue, investors focused on the slightly weaker outlook. 

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Amazon's cloud segment, AWS, performed strongly, but the company's investments in AI and cloud infrastructure weighed on investor concerns.

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Amazon CFO Brian Olsavsky told reporters on a call after earnings that AWS is poised to generate more than $105 billion annually.

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Like several of its peers, Amazon is investing heavily in infrastructure to support the rapid deployment of new AI technologies and cloud services.

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Olsavsky said the company has spent just over $30 billion in the first half of the year on capital expenditures, owing to the growing need for AWS services, including demand for generative AI tools. Amazon expects those investments to increase for the second half of the year, he said.

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On the ecommerce front, the everything store has drawn increasing competition from the likes of Temu and Shein, companies that specialize in low-cost goods that rely on a direct-from-factory supply chain. 

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Amazon is reported to be developing a discount digital storefront of its own to directly compete for fashion and lifestyle spending.

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