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

Key Points

• Amazon shares fell 4.2% to $243.79 after the company missed quarterly expectations, reporting EPS of $1.89 versus $1.97 expected and revenue of $201.94 billion versus $202.22 billion expected. Trading volume rose 61% above the average session volume.
• AI and cloud spending remain central to the outlook. AWS demand and backlog support long-term growth, but roughly $53 billion in AI investment, negative free cash flow, and potentially $220 billion in broader 2026 spending are increasing investor concerns about margins and returns.
• Despite the earnings miss, analyst sentiment remains broadly positive: 57 analysts rate AMZN a Buy and three rate it a Hold, with a consensus price target of $325.12 compared with the recent trading price.

Amazon.com, Inc. (NASDAQ:AMZN - Get Free Report) shares fell 4.2% on Thursday following a dissappointing earnings announcement. The stock traded as low as $241.24 and last traded at $243.79. 74,045,540 shares were traded 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 (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 18.00% and a net margin of 17.44%.

More Amazon.com News

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

Analyst Ratings Changes

A number of research analysts have recently commented on AMZN shares. HSBC restated a "buy" rating and issued a $310.00 target price on shares of Amazon.com in a research note on Friday, July 31st. Citigroup reiterated a "market outperform" rating on shares of Amazon.com in a report on Friday, August 14th. Benchmark lifted their price objective on Amazon.com from $370.00 to $400.00 and gave the stock a "buy" rating in a report on Friday, July 31st. Rosenblatt Securities lifted their price target on shares of Amazon.com from $335.00 to $360.00 and gave the stock a "buy" rating in a research note on Wednesday, September 30th. Finally, Tigress Financial reissued a "buy" rating and issued a $385.00 target price (up from $315.00) on shares of Amazon.com in a report on Tuesday, October 6th. Fifty-seven research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $325.12.

Insiders Place Their Bets

In other Amazon.com news, CEO Andrew Jassy sold 20,000 shares of the firm's stock in a transaction dated Friday, August 21st. The shares were sold at an average price of $259.01, for a total value 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. This trade represents a 0.89% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Douglas Herrington sold 1,000 shares of the stock in a transaction on Thursday, October 1st. The stock was sold at an average price of $251.50, for a total value of $251,500.00. Following the completion of the sale, the chief executive officer owned 474,681 shares in the company, valued at approximately $119,382,271.50. The trade was a 0.21% decrease in their position. 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 valued at $18,580,515. 8.90% of the stock is currently owned by company insiders.

Institutional Trading of Amazon.com

A number of institutional investors have recently modified their holdings of the company. TOP Private Wealth LLC. bought a new stake in shares of Amazon.com during the second quarter valued at approximately $29,000. Bard Associates Inc. bought a new position in shares of Amazon.com in the 2nd quarter worth about $32,000. Longfellow Investment Management Co. LLC purchased a new position in Amazon.com during the 2nd quarter valued at about $33,000. Atomic Invest LLC grew its holdings in Amazon.com by 41.2% in the second quarter. Atomic Invest LLC now owns 168 shares of the e-commerce giant's stock worth $40,000 after purchasing an additional 49 shares during the period. Finally, Strategic Wealth Advisors LLC bought a new position in shares of Amazon.com during the second quarter valued at approximately $68,000. 72.20% of the stock is currently owned by institutional investors.

Amazon.com Stock Down 4.2%

The company has a quick ratio of 0.87, a current ratio of 1.03 and a debt-to-equity ratio of 0.23. The stock has a market capitalization of $2.63 trillion, a PE ratio of 19.61, a price-to-earnings-growth ratio of 2.04 and a beta of 1.45. The company's fifty day moving average price is $255.11 and its 200-day moving average price is $243.14.

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.

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