Amazon Stock Drops as Prime Day Shoppers Spend Less Per Order

Amazon's annual Prime Day has evolved from a company-specific sales event into a major fixture on the U.S. retail calendar, with competitors like Walmart, Target, Best Buy, and Kohl's now launching their own promotions to capture deal-hunting shoppers. This year, U.S. consumers spent a record $26.4 billion online during the four-day Prime Day period from June 23 to June 26, according to Adobe Analytics. While that figure marks a 9.3% increase from last year, the underlying data points to a more complex story for Amazon's core business.

Shoppers Spread Spending Across Retailers

Despite the headline growth, Amazon's own customers spent less per order and per household compared to the previous year. Numerator, a consumer data firm, found the average Amazon Prime Day order in 2026 was $47.66, down from $53.34 a year earlier. Average household spending also slipped to $143.45 from $156.37. Nearly two-thirds of Prime Day households placed at least two separate orders, but the total per household still declined. Meanwhile, Bank of America data shows that overall U.S. e-commerce spending rose 13% year over year in May, with online shopping penetration reaching 29.8%.

Competing retailers benefited from the Prime Day halo effect. Placer.ai reported that during the Prime Day window, store visits jumped 18.4% at Kohl's, 18.1% at Best Buy, 16.3% at Target, and 4.7% at Walmart compared to their typical day-of-week traffic. These gains suggest that consumers are increasingly willing to shop around for deals, rather than concentrating their spending on Amazon alone. This shift comes as Amazon prepares to report its second-quarter earnings on July 30, with investors watching for signs of changing consumer behavior and competitive pressure.

Prime Day Growth Slows, Stock Reacts

While Prime Day continues to drive significant online sales, the pace of growth has slowed. In 2025, U.S. consumers spent $24.1 billion online during the comparable four-day period, representing 30.3% growth from the prior year, according to Adobe. By contrast, this year's 9.3% increase reflects a deceleration, even as the event's duration matched last year's four-day format. Amazon's official Prime Day in 2024 lasted only two days, generating $14.2 billion in U.S. online sales, up 11% year over year.

Amazon shares fell 4.6% on July 23 to $233.66, following a broader pullback in technology stocks after Alphabet's earnings and renewed concerns about the cost of artificial intelligence infrastructure. Over the past five trading days, Amazon stock declined 6.35%, and it is down 8.26% over the past three months, though it remains up about 1.4% year to date. The market's reaction highlights investor sensitivity to both competitive threats and the company's rising capital expenditures.

Retail and AWS Outlook Ahead of Earnings

Bank of America expects Amazon's broader retail business to accelerate in the second quarter, maintaining a Buy rating and a $310 price objective. The firm forecasts total second-quarter revenue of about $198.8 billion, above the $196.8 billion Wall Street consensus cited by the bank. Operating income is projected at $24.1 billion, slightly ahead of the $23.6 billion consensus. North American revenue could reach $116.3 billion, up roughly 16% year over year, compared to Wall Street's $113.9 billion estimate. The timing of Prime Day, which moved from July to June, is expected to boost second-quarter results but may create a headwind for third-quarter comparisons as sales are pulled forward.

Amazon Web Services (AWS) remains a key focus for investors. AWS revenue grew 28% year over year to $37.6 billion in the first quarter, its fastest rate in nearly four years. Bank of America raised its second-quarter AWS growth estimate to 33%, which would put revenue at about $41 billion, compared to Wall Street's $40.5 billion expectation. Some investors may be looking for even stronger growth, with the bank's conversations suggesting expectations as high as 34%. AWS growth is forecast to accelerate further in the third quarter.

Rising Costs and Competitive Pressures

Amazon's capital spending is under scrutiny as the company invests heavily in cloud and artificial intelligence infrastructure. The company expects about $200 billion in capital expenditures for 2026, with Bank of America projecting that figure could rise to $210 billion due to higher memory costs and ongoing demand for computing power. For the second quarter alone, capital expenditures are expected to reach $49 billion. This level of spending has drawn attention across the tech sector, as companies race to expand AI infrastructure before seeing clear returns.

Prime Day's record sales underscore Amazon's continued ability to drive consumer demand, but the event's growing influence on the broader retail landscape means Amazon must now compete more aggressively to retain shopper loyalty. As the company prepares to report earnings, investors are weighing the trade-offs between growth, profitability, and the rising costs of staying ahead in both retail and cloud computing. For a broader look at how shifts among major tech stocks are affecting market leadership, see this analysis of changing S&P 500 dynamics at how the Magnificent Seven's influence is evolving.

Prime Day's evolution from an Amazon-exclusive event to a multi-retailer shopping week highlights the changing nature of consumer loyalty and deal-seeking behavior. As more retailers synchronize their promotions, shoppers have greater incentive to compare prices and split their spending. For Amazon, the challenge is no longer just driving traffic during Prime Day, but ensuring that a meaningful share of that spending still happens on its own platform.

Prime Day's impact on Amazon's financials is shaped by both the timing of the event and the broader competitive environment. Moving Prime Day into June provided a short-term boost to second-quarter revenue, but may create a tougher comparison for the third quarter as sales are pulled forward. Meanwhile, the company's heavy investment in AI and cloud infrastructure reflects a long-term bet on future growth, but also raises questions about near-term profitability and capital allocation. As the retail landscape continues to shift, Amazon's ability to adapt will be closely watched by both investors and competitors.

Prime Day's record-setting sales figures are a reminder of the power of coordinated retail promotions, but they also reveal the limits of any single company's ability to dominate consumer spending. As shoppers become more sophisticated and less loyal to individual brands, retailers must continually innovate to capture attention and wallet share. For investors, the key questions are whether Amazon can maintain its growth trajectory in the face of rising costs and intensifying competition, and how much of the company's future value will come from retail versus cloud and AI services.