Amazon Sounds Alarm Ahead of Earnings as Internal Reports Signal Serious AI Project Overspending

Source Tradingkey

TradingKey - On the eve of Amazon's earnings release, multiple AI projects were reported to have out-of-control costs, prompting engineering executives to urgently sound the alarm.

According to a Financial Times report on July 30, several incidents of severe cost overruns occurred within Amazon due to employees deploying AI models. Most shockingly, one AI project's actual spending exceeded its original budget by as much as 860%, and it was only discovered five months later.

In response, Amazon stated that these cases only involved a few teams and do not represent the overall situation of the company's daily AI usage. However, the company's senior engineers have warned internal teams that while the cost of trial and error in traditional software architecture is usually negligibly cheap, introducing large language models (LLMs) and generative AI means that inefficient code can trigger massive computing power consumption, causing development costs to explode exponentially.

Recently, the massive AI capital expenditures of tech giants like Google and Tesla have triggered market anxiety, and Amazon's report undoubtedly puts already anxious investors on even higher alert. In its previous quarterly earnings report, Amazon provided guidance that shocked Wall Street, estimating that full-year capital expenditure in 2026 would reach as high as $200 billion. Amazon will release its Q2 earnings report after the market closes today, and whether it will further raise this figure has become a key focus for investors.

Since last Tuesday (July 21), Amazon's stock price has fallen for seven consecutive trading days, dropping from a high of $250 to a low of $226, representing a cumulative decline of around 10%. During pre-market trading today, Amazon rebounded by over 3%, with its stock price recovering to around $233, clawing back some of its losses. However, if the earnings report released after the close falls short of expectations, especially if AI capital expenditures climb further, its stock price will breach current support levels and continue to correct by around 10%, heading toward the February-March low of $200.

amzn-price-6a5058fc1d474a58931fa4e81d7bcbd6Amazon stock price chart, Source: TradingView

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Micron's $4.5 billion Taiwan fab won't make a chip until 2028 — the market sold it as a 2026 problemMicron fell 17.46% to $656.39 after Bloomberg reported construction at its $4.5 billion Taoyuan Fab 11E had all but halted over a labor dispute. The plant was not due online until 2028, so no 2026 output is lost. With FY27 EPS consensus near $160 and 2027 HBM sold out, the selloff is a peak-cycle multiple reset, not a demand collapse — and $650 is the line that separates the two.
Author  Irene Q.
Nov 06, Fri
Micron fell 17.46% to $656.39 after Bloomberg reported construction at its $4.5 billion Taoyuan Fab 11E had all but halted over a labor dispute. The plant was not due online until 2028, so no 2026 output is lost. With FY27 EPS consensus near $160 and 2027 HBM sold out, the selloff is a peak-cycle multiple reset, not a demand collapse — and $650 is the line that separates the two.
placeholder
Weekly Report: Gold up 4.5%, Brent down 16.4% — three commodity regimes just resetGold rose 4.51% to $4,074.90 while Brent fell 16.42% to $98.32 in the same five sessions — two inflation hedges, opposite answers. Around them, the gold-silver ratio sits at 78.7 and copper fell 3.72%. Three regime signals, two of them close to flipping, define what commodity traders must re-price before Tuesday's CPI.
Author  Irene Q.
Nov 09, Mon
Gold rose 4.51% to $4,074.90 while Brent fell 16.42% to $98.32 in the same five sessions — two inflation hedges, opposite answers. Around them, the gold-silver ratio sits at 78.7 and copper fell 3.72%. Three regime signals, two of them close to flipping, define what commodity traders must re-price before Tuesday's CPI.
placeholder
The CPI that has no year-over-year number is the one that decides DecemberOctober CPI lands on Nov 10 at 13:30 GMT, and it will be published without a year-over-year figure: BLS never collected October 2025 prices during the federal shutdown. Consensus is +0.3% headline and +0.2% core month-on-month, against +0.6% and +0.3% in September. With December hike odds at 77%, the month-on-month print is now the whole story, and $4,197–4,202 on gold and 4.86% on the 10-year are the levels that price it.
Author  Irene Q.
Nov 09, Mon
October CPI lands on Nov 10 at 13:30 GMT, and it will be published without a year-over-year figure: BLS never collected October 2025 prices during the federal shutdown. Consensus is +0.3% headline and +0.2% core month-on-month, against +0.6% and +0.3% in September. With December hike odds at 77%, the month-on-month print is now the whole story, and $4,197–4,202 on gold and 4.86% on the 10-year are the levels that price it.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - November 10, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for November 10, 2026. Read on for the details.
Author  Mitrade
Yesterday 01: 38
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for November 10, 2026. Read on for the details.
placeholder
Nvidia fell 4.3% on a day the Nasdaq rose 2.7% — this is a governance discount, not an AI warningNvidia closed at $178.67 on November 9, down 4.27% with an intraday low of $170.24, while the Nasdaq rose 2.74% and the Philadelphia Semiconductor Index jumped 6.85%. Volume was roughly 2.5 times the prior session. The board opened an independent review after CEO Jensen Huang's public statement about his personal life. With Q3 earnings on November 17, the two levels that matter are $170.24 and $200."
Author  Irene Q.
Yesterday 03: 27
Nvidia closed at $178.67 on November 9, down 4.27% with an intraday low of $170.24, while the Nasdaq rose 2.74% and the Philadelphia Semiconductor Index jumped 6.85%. Volume was roughly 2.5 times the prior session. The board opened an independent review after CEO Jensen Huang's public statement about his personal life. With Q3 earnings on November 17, the two levels that matter are $170.24 and $200."
goTop
quote