What happened

Amazon (AMZN -1.54%) shareholders lost ground to the market on Thursday as the stock fell 3% by 3:30 p.m. ET, compared to a 1% drop in the S&P 500. The drop pushed the e-commerce giant below the market's return so far in 2022, down 11% since early January.

It came as investors brace for a potentially downbeat earnings report ahead in the next week.

A contented-looking person using a credit card to shop from his smartphone.

Image source: Getty Images.

So what

Amazon made a few announcements before the market opened today, including news that it is expanding its Prime shopping service to third-party retailers. The move might help the company attract more sellers as competition heats up with rivals like eBay, Walmart, and Shopify.

Yet the main factor likely driving the stock lower is worries about its upcoming earnings report. Amazon is set to announce first-quarter results on April 28. The company has announced three consecutive quarters of slowing sales gains, and most investors are expecting another slowdown for the early 2022 period.

That slowdown, coupled with increased spending on its distribution network and cloud infrastructure, might spell weaker earnings results ahead through at least this year.

Now what

Some investors see a bright future ahead for the tech giant, though, as it boosts earnings on the cloud-services business and generates higher profits from a rising Prime subscription membership price. Yet those positive factors might not be obvious in Amazon's earnings report next Thursday.

In any case, the stock will likely remain volatile as investors digest the flood of fresh data as earnings season ramps up over the next week or so. And since the pandemic accelerated its growth so much in 2020 and 2021, it should be no surprise to investors if the business faces a period of relatively weaker earnings as it invests in building up its infrastructure.