Amazon.com (NASDAQ:AMZN) Stock Price Down 1.4% Following Weak Earnings

Key Points

• Amazon shares fell 1.4% after the company reported third-quarter EPS of $1.89 and revenue of $201.94 billion, both slightly below analyst expectations, despite 12.1% year-over-year revenue growth.
• AWS was a bright spot, with revenue rising 39% to about $46 billion, but investors remain concerned about roughly $220 billion in planned 2026 capital spending, negative free cash flow and a weaker-than-expected fourth-quarter outlook.
• Wall Street remains broadly positive, with a consensus “Moderate Buy” rating and an average price target of $320.86; Amazon also plans to offer its Trainium AI chips to external customers by late 2027.

Amazon.com, Inc. (NASDAQ:AMZN - Get Free Report)'s stock price dropped 1.4% during trading on Friday following a weaker than expected earnings announcement. The company traded as low as $229.36 and last traded at $240.35. Approximately 103,159,041 shares traded hands during mid-day trading, an increase of 123% from the average daily volume of 46,356,121 shares. The stock had previously closed at $243.79.

The e-commerce giant reported $1.89 EPS 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 analyst estimates of $202.22 billion. Amazon.com had a return on equity of 18.00% and a net margin of 17.44%. The business's quarterly revenue was up 12.1% on a year-over-year basis. During the same quarter last year, the business posted $1.95 earnings per share.

Key Stories Impacting Amazon.com

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

• Positive Sentiment: AWS revenue grew 39% year over year to approximately $46 billion, its fastest growth in nearly five years. Management expects AWS growth to exceed 40% in both 2027 and 2028, supported by AI demand and a substantial backlog. Amazon Q3 Revenues Miss Estimates, AWS Growth Hits Near 5-Year High
• Positive Sentiment: Analysts remain constructive despite trimming some targets. Rosenblatt reaffirmed a Buy rating with a $360 target, while Wells Fargo, Morgan Stanley, RBC, Canaccord, Monness and others maintained Overweight or Buy ratings. Mizuho raised its target to $335. Amazon stock falls: why analysts are saying it’s a buying opportunity
• Positive Sentiment: Amazon plans to sell its internally developed Trainium AI chips to outside customers by late 2027, potentially creating a new revenue stream and reducing dependence on competing chip suppliers. Amazon Pharmacy usage also rose more than 60% year over year, highlighting growth opportunities beyond retail and AWS. Amazon Has Bigger Plans for AI Chips
• Neutral Sentiment: Amazon reported $201.94 billion in third-quarter revenue and $1.89 in EPS, with revenue up 12.1% year over year. However, both figures fell short of consensus expectations, making the quarter a mixed result despite strong cloud performance. Amazon third-quarter earnings report
• Negative Sentiment: Investors are concerned that roughly $220 billion of planned 2026 capital spending—primarily tied to AI and data-center capacity—is overwhelming near-term returns. Amazon posted a $42.4 billion trailing-12-month free-cash-flow loss, while long-term debt has risen substantially, increasing financing and execution risks. Amazon’s Record Margins Couldn’t Stop the Sell-Off
• Negative Sentiment: Amazon’s fourth-quarter revenue outlook was largely below Wall Street estimates, raising concerns about holiday-season retail demand and the ability of AWS growth to offset softer commerce trends. The broader technology sell-off has amplified these worries about AI spending and future profitability. Amazon projects fourth-quarter sales below estimates

Wall Street Analyst Weigh In

Several research firms have weighed in on AMZN. TD Cowen reaffirmed a "buy" rating and set a $340.00 price target (down from $350.00) on shares of Amazon.com in a research report on Friday. Citigroup restated a "market outperform" rating on shares of Amazon.com in a research note on Friday. Oppenheimer restated an "outperform" rating on shares of Amazon.com in a research report on Friday, July 31st. Sanford C. Bernstein reiterated an "outperform" rating and set a $320.00 price objective (up from $315.00) on shares of Amazon.com in a research note on Friday, July 31st. Finally, Monness Crespi & Hardt upped their price objective on Amazon.com from $315.00 to $330.00 and gave the stock a "buy" rating in a research report on Friday, July 31st. One investment analyst has rated the stock with a Strong Buy rating, fifty-six have issued a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $320.86.

Insider Buying and Selling at Amazon.com

In other Amazon.com news, VP Shelley Reynolds sold 2,343 shares of the business'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 $606,860.43. Following the transaction, the vice president directly owned 119,780 shares of the company's stock, valued at approximately $31,024,217.80. The trade was a 1.92% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Andrew Jassy sold 20,000 shares of the firm's stock in a transaction on Friday, August 21st. The stock was sold at an average price of $259.01, for a total transaction of $5,180,200.00. Following the completion of the sale, the chief executive officer owned 2,235,766 shares of the company's stock, valued at $579,085,751.66. The trade was a 0.89% 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. In the last ninety 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 Investors Weigh In On Amazon.com

Institutional investors and hedge funds have recently made changes to their positions in the business. Red Crane Wealth Management LLC lifted its holdings in shares of Amazon.com by 2.3% during 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. lifted its position in Amazon.com by 2.7% in the third quarter. Stegent Equity Advisors Inc. now owns 1,462 shares of the e-commerce giant's stock valued at $364,000 after purchasing an additional 39 shares during the period. Robinson Smith Wealth Advisors LLC lifted its position 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 valued at $1,147,000 after purchasing an additional 40 shares during the period. Sfam LLC boosted its holdings in Amazon.com by 3.4% in the 1st quarter. Sfam LLC now owns 1,224 shares of the e-commerce giant's stock valued at $255,000 after purchasing an additional 40 shares in the last quarter. Finally, Measured Risk Portfolios Inc. increased its position 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 purchasing an additional 40 shares during the period. Institutional investors and hedge funds own 72.20% of the company's stock.

Amazon.com Trading Down 1.4%

The company has a current ratio of 1.03, a quick ratio of 0.87 and a debt-to-equity ratio of 0.23. The business has a 50 day moving average price of $254.67 and a 200-day moving average price of $243.12. The firm has a market capitalization of $2.59 trillion, a PE ratio of 19.34, a P/E/G ratio of 1.98 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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