Amazon.com (NASDAQ:AMZN) Stock Falls 1.7% - Here's Why

Key Points

• Amazon shares fell 1.7% on Wednesday to $266.17, with trading volume 21% below its average.
• Investor concerns include an expected $220 billion in 2026 capital expenditures for AI infrastructure, which could weigh on free cash flow; strong AWS growth and a $578 billion backlog offer a counterpoint.
• Amazon’s latest quarterly EPS and revenue both came in slightly below consensus, while analysts maintain a “Moderate Buy” consensus rating and an average price target of $321.74.

Shares of Amazon.com, Inc. (NASDAQ:AMZN - Get Free Report) traded down 1.7% during trading on Wednesday. The company traded as low as $265.62 and last traded at $266.17. Approximately 36,979,320 shares changed hands during trading, a decline of 21% from the average session volume of 46,712,500 shares. The stock had previously closed at $270.87.

Recent Amazon.com Headlines

Investors following AMZN have been watching these headlines:

• Positive Sentiment: AWS growth of nearly 39% and a reported $578 billion backlog point to substantial demand for cloud capacity. CEO Matt Garman also said AI inference is still at an early stage, highlighting potential for further AWS growth. Amazon’s Rally Is Outpacing Big Tech, But Can AWS Justify the AI Spending?
• Negative Sentiment: The AI infrastructure buildout is pressuring free cash flow. Amazon expects about $220 billion in 2026 capital expenditures, so investors may remain concerned about whether future AWS returns will justify the spending. Will Rising AI Capex Weigh on Amazon’s Free Cash Flow Prospects?
• Negative Sentiment: A federal judge certified a class action alleging Amazon Photos collected and stored biometric data without required notice and consent, adding potential legal and reputational risk. Class Action Certified Over Alleged Biometric Data Collection

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on AMZN shares. Wolfe Research reissued an "outperform" rating and set a $315.00 target price on shares of Amazon.com in a report on Friday, July 31st. Morgan Stanley dropped their target price on Amazon.com from $350.00 to $335.00 and set an "overweight" rating on the stock in a research report on Friday, October 30th. Deutsche Bank reaffirmed a "buy" rating and issued a $325.00 price target (up from $315.00) on shares of Amazon.com in a report on Friday, July 31st. Wells Fargo & Company decreased their price objective on Amazon.com from $329.00 to $326.00 and set an "overweight" rating on the stock in a research note on Friday, October 30th. Finally, Truist Financial set a $390.00 price objective on Amazon.com in a research note on Friday, October 30th. Two investment analysts have rated the stock with a Strong Buy rating, fifty-five have assigned a Buy rating and three have given a Hold rating to the company's stock. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $321.74.

Amazon.com Stock Down 1.7%

The company has a debt-to-equity ratio of 0.28, a current ratio of 0.99 and a quick ratio of 0.82. The company has a fifty day moving average price of $254.19 and a 200 day moving average price of $243.93. The company has a market cap of $2.88 trillion, a PE ratio of 21.52, a price-to-earnings-growth ratio of 2.03 and a beta of 1.49.

Amazon.com (NASDAQ:AMZN - Get Free Report) last issued its quarterly earnings results on Thursday, October 29th. The e-commerce giant reported $1.89 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.97 by ($0.08). The firm had revenue of $201.94 billion for the quarter, compared to the consensus estimate of $202.22 billion. Amazon.com had a return on equity of 15.72% and a net margin of 16.90%. The company's revenue for the quarter was up 12.1% on a year-over-year basis. During the same period last year, the firm earned $1.95 EPS. As a group, analysts anticipate that Amazon.com, Inc. will post 7.80 EPS for the current year.

Insider Buying and Selling at Amazon.com

In other Amazon.com news, VP Shelley Reynolds sold 2,343 shares of Amazon.com 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 $606,860.43. Following the transaction, the vice president directly owned 119,780 shares of the company's stock, valued at $31,024,217.80. The trade was a 1.92% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Matthew Garman sold 14,541 shares of the business's stock in a transaction that occurred on Friday, August 21st. The shares were sold at an average price of $259.06, for a total value of $3,766,991.46. Following the completion of the sale, the chief executive officer owned 17,794 shares of the company's stock, valued at $4,609,713.64. The trade was a 44.97% 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 71,589 shares of company stock valued at $18,545,595. 8.90% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in the company. Silvant Capital Management LLC bought a new position in shares of Amazon.com during the 2nd quarter valued at $60,065,000. Public Employees Retirement System of Ohio purchased a new position in shares of Amazon.com in the 2nd quarter worth $909,868,000. Northstar Financial Companies Inc. bought a new stake in shares of Amazon.com in the second quarter worth $3,376,000. Gryphon Financial Partners LLC grew its holdings in shares of Amazon.com by 7.5% in the first quarter. Gryphon Financial Partners LLC now owns 73,085 shares of the e-commerce giant's stock worth $15,221,000 after acquiring an additional 5,125 shares during the period. Finally, First Citizens Bank & Trust Co. increased its position in Amazon.com by 1.7% during the first quarter. First Citizens Bank & Trust Co. now owns 303,862 shares of the e-commerce giant's stock valued at $63,285,000 after acquiring an additional 5,104 shares during the last quarter. 72.20% of the stock is owned by hedge funds and other institutional investors.

About Amazon.com

Amazon.com, Inc. is a technology and e-commerce company founded by Jeff Bezos in 1994 as an online bookstore. It has since grown into a global business serving consumers, sellers, developers, enterprises and content creators. Amazon operates online stores and marketplaces, where it sells products directly and enables third-party sellers to reach customers. Its other businesses include Amazon Web Services, which provides cloud computing and related services; digital advertising; Prime memberships; and entertainment offerings such as streaming video and music.

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