Amazon.com (NASDAQ:AMZN) Stock Price Breaks Below 200 Day Moving Average on Disappointing Earnings

Key Points

• Amazon’s quarterly results fell short of expectations: EPS was $1.89 versus the $1.97 consensus, while revenue reached $201.94 billion compared with $202.22 billion expected. The stock fell below its 200-day moving average, trading as low as $229.36.
• AWS provided a major positive: Cloud revenue grew 39% to roughly $46 billion, supported by strong AI demand, backlog growth and increased workloads. Management expects AWS growth could exceed 40% annually in 2027 and 2028.
• Heavy AI investment is raising investor concerns: Amazon’s capital spending is pressuring free cash flow and increasing leverage, while fourth-quarter guidance was viewed as soft. Analysts remain broadly bullish, but several firms cut price targets following the earnings release.

Amazon.com, Inc. (NASDAQ:AMZN - Get Free Report)'s stock price crossed below its 200-day moving average during trading on Friday following a dissappointing earnings announcement. The stock has a 200-day moving average of $243.09 and traded as low as $229.36. Amazon.com shares last traded at $240.35, with a volume of 104,747,107 shares changing hands.

The e-commerce giant reported $1.89 EPS for the quarter, missing analysts' consensus estimates of $1.97 by ($0.08). Amazon.com had a net margin of 16.90% and a return on equity of 16.94%. The business had revenue of $201.94 billion during the quarter, compared to analysts' expectations of $202.22 billion. During the same period in the prior year, the business posted $1.95 EPS. The business's revenue was up 12.1% on a year-over-year basis.

More Amazon.com News

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

• Positive Sentiment: AWS growth accelerated significantly. Amazon Web Services revenue rose 39% to approximately $46 billion, its fastest growth in nearly five years. Management said AWS could grow more than 40% annually in 2027 and 2028, supported by AI demand, a large backlog and rising cloud workloads. Analysts including JPMorgan, Canaccord, Monness and RBC maintained bullish ratings or targets, viewing AWS as a potential long-term, trillion-dollar business. AWS growth hits 39 percent
• Positive Sentiment: Amazon continues expanding its AI and adjacent businesses. The company plans to sell its Trainium AI chips externally by late 2027, while Amazon Pharmacy users increased more than 60% year over year and Prime Video reportedly reached profitability. Management also highlighted longer-term opportunities in retail automation, satellite internet and AI infrastructure. Amazon Trainium AI chips
• Neutral Sentiment: Analyst sentiment remains broadly constructive, but targets were trimmed. Several firms reaffirmed Buy or Outperform ratings, with targets generally well above the current trading level. However, Wells Fargo, Morgan Stanley, Wedbush, Scotiabank, Cantor Fitzgerald and others lowered targets, signaling reduced near-term confidence after the earnings release. Amazon price target changes
• Negative Sentiment: Amazon missed both major Q3 estimates. Earnings per share came in at $1.89 versus roughly $1.97–$2.01 expected, while revenue was $201.94 billion compared with about $202.2 billion anticipated. Fourth-quarter revenue guidance was also viewed as soft, raising concerns about holiday-season retail demand. Amazon fourth-quarter guidance
• Negative Sentiment: AI investment is pressuring cash flow and leverage. Amazon spent about $77 billion on property and equipment in Q3 and continues targeting approximately $220 billion in 2026 capital expenditures. Trailing free cash flow fell to a $42.4 billion deficit, while long-term debt increased substantially. Investors are questioning when the spending will generate adequate returns, overshadowing AWS’s strong growth. Amazon AI spending concerns
• Negative Sentiment: Broader technology-sector weakness amplified the selling. Amazon’s report contributed to a wider Nasdaq decline as investors reconsidered whether massive AI infrastructure spending across Big Tech can produce timely profits. Concerns about AI-related debt, cash burn and valuation affected sentiment beyond Amazon itself. Nasdaq and AI spending concerns

Analyst Upgrades and Downgrades

A number of equities research analysts have recently issued reports on the company. Oppenheimer reiterated an "outperform" rating on shares of Amazon.com in a research note on Friday, July 31st. Scotiabank reduced their price target on Amazon.com from $325.00 to $300.00 and set a "sector outperform" rating on the stock in a research report on Friday. Bank of America restated a "buy" rating and issued a $317.00 price target on shares of Amazon.com in a report on Friday. KeyCorp set a $345.00 price objective on shares of Amazon.com and gave the company an "overweight" rating in a research report on Friday. Finally, Needham & Company LLC reaffirmed a "buy" rating and issued a $300.00 price objective on shares of Amazon.com in a research report on Friday, July 31st. One investment analyst has rated the stock with a Strong Buy rating, fifty-six have given a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat, Amazon.com currently has an average rating of "Moderate Buy" and a consensus target price of $320.86.

Insiders Place Their Bets

In other news, VP Shelley Reynolds sold 2,343 shares of the stock in a transaction dated Friday, August 21st. The shares were sold at an average price of $259.01, for a total transaction of $606,860.43. Following the transaction, the vice president owned 119,780 shares of the company's stock, valued at approximately $31,024,217.80. This trade represents a 1.92% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Matthew S. Garman sold 14,541 shares of Amazon.com stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $259.06, for a total value of $3,766,991.46. Following the completion of the transaction, the chief executive officer owned 17,794 shares of the company's stock, valued at $4,609,713.64. This trade represents a 44.97% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 71,589 shares of company stock worth $18,580,515. Company insiders own 8.90% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently bought and sold shares of AMZN. Trust Asset Management LLC grew its holdings in shares of Amazon.com by 3.3% during the 2nd quarter. Trust Asset Management LLC now owns 107,563 shares of the e-commerce giant's stock valued at $26,000 after acquiring an additional 3,414 shares in the last quarter. TOP Private Wealth LLC. purchased a new stake in shares of Amazon.com during the second quarter worth $29,000. Bard Associates Inc. purchased a new stake in shares of Amazon.com during the second quarter worth $32,000. Longfellow Investment Management Co. LLC acquired a new stake in Amazon.com during the second quarter valued at $33,000. Finally, Atomic Invest LLC boosted its position in Amazon.com by 41.2% during the second quarter. Atomic Invest LLC now owns 168 shares of the e-commerce giant's stock valued at $40,000 after purchasing an additional 49 shares during the last quarter. Institutional investors own 72.20% of the company's stock.

Amazon.com Stock Down 1.4%

The business has a 50 day simple moving average of $254.28 and a 200 day simple moving average of $243.09. The company has a debt-to-equity ratio of 0.23, a current ratio of 1.03 and a quick ratio of 0.87. The stock has a market cap of $2.59 trillion, a PE ratio of 19.43, a P/E/G ratio of 1.89 and a beta of 1.45.

Amazon.com Company Profile

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.

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