Amazon.com (NASDAQ:AMZN) Shares Gap Up After Better-Than-Expected Earnings

Key Points

• Amazon shares jumped 13.7%, opening at $265 after the company reported substantially better-than-expected quarterly results.
• Amazon posted $5.75 in adjusted EPS versus the $1.82 consensus estimate, while revenue rose 19.6% year over year to $200.61 billion. AWS revenue grew 37% to $42.2 billion, helping ease concerns about the company’s heavy AI infrastructure spending.
• Despite strong results and widespread analyst price-target increases, Amazon’s third-quarter revenue guidance of $197 billion to $202 billion fell below expectations, while planned 2026 capital spending of roughly $220 billion continues to pressure free cash flow.

Amazon.com, Inc. (NASDAQ:AMZN)'s stock price gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $235.50, but opened at $265.00. Amazon.com shares last traded at $267.6630, with a volume of 28,879,419 shares changing hands.

The e-commerce giant reported $5.75 earnings per share for the quarter, beating the consensus estimate of $1.82 by $3.93. Amazon.com had a net margin of 12.22% and a return on equity of 19.92%. The company had revenue of $200.61 billion during the quarter, compared to analyst estimates of $197.03 billion. During the same quarter in the previous year, the business posted $1.68 EPS. Amazon.com's revenue for the quarter was up 19.6% compared to the same quarter last year.

Trending Headlines about Amazon.com

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

• Positive Sentiment: Strong Q2 results: Amazon reported $200.6 billion in revenue, up 20% year over year, while adjusted earnings per share of $5.75 substantially exceeded the $1.82 consensus estimate. Operating income increased 43% to $27.5 billion. Amazon.com Announces Second Quarter Results
• Positive Sentiment: AWS growth eased AI-spending concerns: AWS revenue surged 37% to $42.2 billion, its fastest growth in more than four years, as enterprise AI demand and new arrangements with Meta and OpenAI drove cloud consumption. AWS operating profit reached $16.6 billion, supporting the view that Amazon is beginning to monetize its substantial AI investments. Amazon jumps as AWS growth soothes fears over rising AI spending
• Positive Sentiment: Broad business momentum: North America sales rose 16%, advertising revenue climbed 26% to nearly $20 billion, and Prime Day activity helped support the retail business. Amazon also said AI demand remains strong, with CEO Andy Jassy describing future AWS capacity needs as “striking.” Amazon Thrives On Big Q2 For AI, Advertising Revenue Climbs
• Positive Sentiment: Analyst optimism intensified: JPMorgan raised its price target to $365 from $330 and maintained an Overweight rating. Truist lifted its target to $350 from $320, while Monness Crespi, Rosenblatt, KeyCorp, Baird, Bank of America and other firms also raised or reaffirmed bullish targets. J.P. Morgan raises Amazon price target
• Positive Sentiment: Zoox reached a commercial milestone: Amazon’s autonomous-vehicle unit received approval to begin charging for rides in its purpose-built, steering-wheel-free robotaxis, allowing limited deployment in Las Vegas. The move could create a long-term growth option, although safety advocates questioned the supporting data. Amazon's Zoox to begin charging for rides in Las Vegas
• Neutral Sentiment: Investment returns remain under scrutiny: Amazon plans approximately $220 billion of 2026 capital spending, largely for AI infrastructure. Management sees demand exceeding available capacity, but the spending weighs on free cash flow and has raised questions about financing and future margins. Amazon will spend $220 billion this year
• Negative Sentiment: Near-term guidance was softer than expected: Amazon forecast third-quarter revenue of $197 billion to $202 billion, below the roughly $204.6 billion analyst consensus, creating a potential offset to the otherwise strong results.

Analyst Upgrades and Downgrades

A number of research analysts recently weighed in on the company. Mizuho set a $330.00 price target on Amazon.com in a research note on Friday. Scotiabank restated an "outperform" rating and set a $325.00 price objective (up from $275.00) on shares of Amazon.com in a report on Thursday, April 30th. HSBC reaffirmed a "buy" rating and set a $310.00 target price on shares of Amazon.com in a research report on Friday. TD Securities upgraded Amazon.com to a "buy" rating in a report on Monday, April 13th. Finally, Needham & Company LLC reissued a "buy" rating and issued a $300.00 price target on shares of Amazon.com in a research report on Friday. Fifty-seven equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $318.38.

Insider Transactions at Amazon.com

In other news, CEO Matthew S. Garman sold 15,467 shares of the stock in a transaction that occurred on Thursday, May 21st. The stock was sold at an average price of $263.40, for a total value of $4,074,007.80. Following the completion of the sale, the chief executive officer directly owned 14,159 shares of the company's stock, valued at $3,729,480.60. This represents a 52.21% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Douglas J. Herrington sold 1,000 shares of the company's stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $239.77, for a total value of $239,770.00. Following the sale, the chief executive officer owned 484,527 shares of the company's stock, valued at $116,175,038.79. This trade represents a 0.21% decrease in their position. 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 quarter, insiders sold 135,719 shares of company stock valued at $36,438,002. Corporate insiders own 8.90% of the company's stock.

Institutional Trading of Amazon.com

Several institutional investors have recently made changes to their positions in AMZN. Norges Bank purchased a new stake in shares of Amazon.com during the fourth quarter valued at approximately $32,868,735,000. Auto Owners Insurance Co boosted its position in Amazon.com by 27,376.7% in the fourth quarter. Auto Owners Insurance Co now owns 98,448,885 shares of the e-commerce giant's stock worth $2,272,397,000 after purchasing an additional 98,090,585 shares during the last quarter. J. Stern & Co. LLP boosted its position in Amazon.com by 20,598.0% in the fourth quarter. J. Stern & Co. LLP now owns 87,982,814 shares of the e-commerce giant's stock worth $20,308,193,000 after purchasing an additional 87,557,736 shares during the last quarter. Nuveen LLC bought a new position in Amazon.com in the 1st quarter valued at $11,674,091,000. Finally, Cardano Risk Management B.V. grew its stake in Amazon.com by 879.4% in the 4th quarter. Cardano Risk Management B.V. now owns 27,862,400 shares of the e-commerce giant's stock valued at $6,431,199,000 after purchasing an additional 25,017,588 shares during the period. Institutional investors own 72.20% of the company's stock.

Amazon.com Trading Up 13.7%

The stock has a market capitalization of $2.88 trillion, a PE ratio of 32.15, a price-to-earnings-growth ratio of 1.70 and a beta of 1.46. The firm has a 50-day moving average price of $245.59 and a 200-day moving average price of $235.97. The company has a current ratio of 1.18, a quick ratio of 1.01 and a debt-to-equity ratio of 0.27.

About Amazon.com

Amazon.com, Inc is a diversified technology and retail company best known for its e-commerce marketplace and broad portfolio of consumer and enterprise services. Founded by Jeff Bezos in 1994 and headquartered in Seattle, Washington, the company launched as an online bookseller and expanded into a global retail platform that sells products directly to consumers and provides a marketplace for third-party sellers. Over time Amazon has grown beyond retail into areas including cloud computing, digital media, devices and logistics.

Key businesses and offerings include Amazon's online marketplace and fulfillment services, the Amazon Prime membership program (which bundles expedited shipping with streaming and other benefits), Amazon Web Services (AWS) which supplies on-demand cloud computing and storage to businesses and public-sector customers, and a range of content and advertising services such as Prime Video and Amazon Advertising.

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