Amazon.com (NASDAQ:AMZN) Stock Falls 4.2% After Earnings Miss

Amazon.com, Inc. (NASDAQ:AMZN)’s share price dropped 4.2% on Thursday following a weaker than expected earnings announcement. The company traded as low as $241.24 and last traded at $243.79. Approximately 74,045,540 shares traded hands during trading, an increase of 61% from the average session volume of 45,993,520 shares. The stock had previously closed at $254.60.

The e-commerce giant reported $1.89 earnings per share for the quarter, missing the consensus estimate of $1.97 by ($0.08). The company had revenue of $201.94 billion for the quarter, compared to the consensus estimate of $202.22 billion. Amazon.com had a net margin of 17.44% and a return on equity of 18.00%.

Trending Headlines about Amazon.com

Here are the key news stories impacting Amazon.com this week:

• Positive Sentiment: AWS demand remains strong. Analysts expect AWS revenue growth of roughly 38%, while Amazon has said much of its cloud capacity is booked through this year and into 2027. A reported $496 billion backlog and large customer commitments, including Anthropic’s minimum-spending agreement, support the long-term cloud outlook. Amazon to report Q3 earnings after the bell
• Positive Sentiment: AI infrastructure demand is creating strategic opportunities. Amazon’s long-term power agreements, including support for more than $3 billion of investment at Maryland’s Calvert Cliffs nuclear plant, could help secure electricity for future data centers. The company is also expanding satellite connectivity following regulatory approval for its Globalstar transaction. Amazon wins FCC approval for Globalstar deal
• Neutral Sentiment: Tonight’s earnings are the key catalyst. Investors will focus on AWS growth, operating margins, capital expenditures, free cash flow, and management’s outlook for AI monetization. Options markets imply an unusually large post-earnings move, reflecting elevated uncertainty. Expected Amazon earnings move
• Negative Sentiment: AI spending and cash flow are the central concern. Amazon reportedly invested approximately $53 billion in AI this year, while free cash flow turned negative. Its broader 2026 spending plan could approach $220 billion, increasing pressure on management to demonstrate near-term returns from data-center and AI investment. Amazon AI spending and Q3 earnings preview
• Negative Sentiment: Broader technology-sector weakness is raising the bar. Alphabet’s sharp post-earnings selloff, linked to heavy AI spending and renewed cash-flow concerns, has made investors more sensitive to AWS margins and Amazon’s spending guidance.
• Negative Sentiment: Amazon’s retail moat may face new competition. Investor Gene Munster warned that AI shopping agents could become the starting point for purchases, potentially weakening Amazon’s control over product discovery and customer traffic. Gene Munster warns AI bots threaten Amazon shopping

Wall Street Analysts Forecast Growth

A number of analysts have recently commented on AMZN shares. BMO Capital Markets reiterated an “outperform” rating on shares of Amazon.com in a research note on Tuesday, October 20th. Oppenheimer restated an “outperform” rating on shares of Amazon.com in a research note on Friday, July 31st. Robert W. Baird set a $310.00 target price on Amazon.com and gave the company an “outperform” rating in a report on Friday, July 31st. Barclays reaffirmed an “overweight” rating and set a $365.00 price target (up from $330.00) on shares of Amazon.com in a research report on Friday, July 31st. Finally, The Goldman Sachs Group reaffirmed a “buy” rating and set a $375.00 target price (up from $335.00) on shares of Amazon.com in a report on Friday, July 31st. Fifty-seven analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. According to MarketBeat, Amazon.com has an average rating of “Moderate Buy” and an average price target of $325.12.

Insider Transactions at Amazon.com

In related news, CEO Matthew S. Garman sold 14,541 shares of Amazon.com stock in a transaction that occurred on Friday, August 21st. The stock was sold at an average price of $259.06, for a total transaction of $3,766,991.46. Following the sale, the chief executive officer owned 17,794 shares of the company’s stock, valued at approximately $4,609,713.64. This trade represents a 44.97% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Douglas Herrington sold 6,362 shares of the company’s stock in a transaction that occurred on Friday, August 21st. The stock was sold at an average price of $259.01, for a total value of $1,647,821.62. Following the completion of the transaction, the chief executive officer owned 476,681 shares of the company’s stock, valued at $123,465,145.81. The trade was a 1.32% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 71,589 shares of company stock valued at $18,580,515. 8.90% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of AMZN. Red Crane Wealth Management LLC increased its stake in Amazon.com by 2.3% in the first quarter. Red Crane Wealth Management LLC now owns 1,663 shares of the e-commerce giant’s stock worth $346,000 after purchasing an additional 38 shares during the period. Stegent Equity Advisors Inc. increased its position in shares of Amazon.com by 2.7% during the third quarter. Stegent Equity Advisors Inc. now owns 1,462 shares of the e-commerce giant’s stock worth $364,000 after acquiring an additional 39 shares during the period. Robinson Smith Wealth Advisors LLC grew its stake in Amazon.com by 0.7% in the first quarter. Robinson Smith Wealth Advisors LLC now owns 5,509 shares of the e-commerce giant’s stock worth $1,147,000 after purchasing an additional 40 shares in the last quarter. Sfam LLC lifted its stake in Amazon.com by 3.4% in the first quarter. Sfam LLC now owns 1,224 shares of the e-commerce giant’s stock worth $255,000 after acquiring an additional 40 shares during the period. Finally, Measured Risk Portfolios Inc. grew its holdings in Amazon.com by 3.4% during the 1st quarter. Measured Risk Portfolios Inc. now owns 1,206 shares of the e-commerce giant’s stock worth $251,000 after acquiring an additional 40 shares in the last quarter. 72.20% of the stock is currently owned by institutional investors.

Amazon.com Stock Performance

The company has a debt-to-equity ratio of 0.23, a quick ratio of 0.87 and a current ratio of 1.03. The firm’s fifty day moving average price is $255.11 and its 200 day moving average price is $243.14. The firm has a market cap of $2.63 trillion, a P/E ratio of 19.61, a price-to-earnings-growth ratio of 2.04 and a beta of 1.45.

About Amazon.com

Amazon.com, Inc is a global technology and e-commerce company founded by Jeff Bezos in 1994. Originally launched as an online bookstore, the company has expanded into a broad digital marketplace offering consumer products across numerous categories, including electronics, household goods, apparel, groceries and other merchandise. Amazon also sells products under its own brands and provides logistics, fulfillment and delivery services that support its retail operations and third-party sellers.

The company’s principal businesses include online and physical retail, Amazon Web Services (AWS), digital advertising, subscription services and consumer technology.