Amazon.com (NASDAQ:AMZN) Stock Falls 1.7% – Here’s What Happened

Shares of Amazon.com, Inc. (NASDAQ:AMZN) were down 1.7% during mid-day trading on Wednesday. The company traded as low as $252.66 and last traded at $254.08. 33,414,283 shares traded hands during trading, a decline of 28% from the average session volume of 46,324,363 shares. The stock had previously closed at $258.58.

Key Amazon.com News

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

• Positive Sentiment: AWS and AI demand remain key bullish catalysts. AWS’s reported backlog has reached approximately $496 billion, while cloud margins have expanded to about 39%. Amazon is also considering a roughly $7 billion acquisition of AI startup Decart, which could improve the performance of workloads running on both Nvidia and Amazon’s custom chips. AWS backlog and cloud margins article
• Positive Sentiment: Prime Video is pursuing greater engagement. Amazon is making multibillion-dollar investments in live sports rights, theatrical films and channel distribution to strengthen Prime’s value proposition and increase customer engagement. Amazon live sports strategy article
• Neutral Sentiment: Investors are focused on the upcoming third-quarter earnings report. Expectations include continued AWS acceleration and improving operating cash flow, but heavy AI infrastructure spending is likely to pressure near-term free cash flow and margins. Amazon AI spending and earnings article
• Negative Sentiment: Lawmakers are seeking a site-specific FAA environmental review of Amazon’s proposed Prime Air drone hub near Boston. Concerns include noise, privacy, public safety, environmental effects and lithium-ion battery fires. The review request could delay the facility and adds regulatory uncertainty. FAA review of Amazon drone hub article
• Negative Sentiment: Analyst price-target reductions are adding pressure ahead of earnings. The revisions reflect concerns that Amazon’s approximately $200 billion-plus AI and data-center spending plan could weigh on cash generation and returns before the investments produce sufficient growth. Amazon analyst price-target article

Wall Street Analysts Forecast Growth

A number of research firms have commented on AMZN. Telsey Advisory Group set a $335.00 target price on Amazon.com and gave the stock an “outperform” rating in a research report on Friday, July 31st. Mizuho set a $330.00 price target on Amazon.com and gave the company an “outperform” rating in a research report on Friday, July 31st. Raymond James Financial reaffirmed an “outperform” rating and set a $390.00 price target (up from $280.00) on shares of Amazon.com in a research note on Friday, July 31st. Truist Financial boosted their price objective on shares of Amazon.com from $320.00 to $350.00 and gave the stock a “buy” rating in a research report on Friday, July 31st. Finally, Robert W. Baird set a $310.00 price objective on shares of Amazon.com and gave the company an “outperform” rating in a research note on Friday, July 31st. Fifty-six investment 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 company has an average rating of “Moderate Buy” and a consensus price target of $322.53.

Amazon.com Trading Down 1.7%

The stock has a market cap of $2.74 trillion, a PE ratio of 20.44, a PEG ratio of 2.01 and a beta of 1.45. The business has a 50-day moving average of $257.96 and a 200 day moving average of $250.86. The company has a debt-to-equity ratio of 0.23, a quick ratio of 0.87 and a current ratio of 1.03.

Amazon.com (NASDAQ:AMZN) last released its quarterly earnings results on Thursday, July 30th. The e-commerce giant reported $5.75 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.82 by $3.93. The company had revenue of $200.61 billion for the quarter, compared to analysts’ expectations of $197.03 billion. Amazon.com had a net margin of 17.44% and a return on equity of 18.00%. The firm’s revenue for the quarter was up 19.6% compared to the same quarter last year. During the same period last year, the company earned $1.68 EPS. Equities research analysts predict that Amazon.com, Inc. will post 8.03 EPS for the current fiscal year.

Insider Buying and Selling

In other Amazon.com news, SVP David Zapolsky sold 9,258 shares of the stock in a transaction on Monday, August 24th. The stock was sold at an average price of $259.77, for a total transaction of $2,404,950.66. Following the transaction, the senior vice president owned 41,190 shares of the company’s stock, valued at $10,699,926.30. This represents a 18.35% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Matthew S. Garman sold 14,541 shares of the firm’s stock in a transaction on 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 sale, the chief executive officer owned 17,794 shares in the company, valued at $4,609,713.64. This trade represents a 44.97% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 71,589 shares of company stock worth $18,580,515 in the last three months. 8.90% of the stock is currently owned by insiders.

Institutional Trading of Amazon.com

A number of hedge funds have recently added to or reduced their stakes in the business. State Street Corp grew its stake in shares of Amazon.com by 5.5% during the 2nd quarter. State Street Corp now owns 411,848,346 shares of the e-commerce giant’s stock valued at $95,504,904,000 after buying an additional 21,398,025 shares during the period. Bank of America Corp DE purchased a new position in shares of Amazon.com in the 2nd quarter worth $22,218,775,000. Bank of New York Mellon Corp purchased a new position in shares of Amazon.com in the 2nd quarter worth $16,341,405,000. Amundi boosted its holdings in Amazon.com by 3.9% in the second quarter. Amundi now owns 63,822,242 shares of the e-commerce giant’s stock valued at $15,211,393,000 after acquiring an additional 2,421,739 shares during the last quarter. Finally, Invesco Ltd. boosted its holdings in Amazon.com by 3.3% in the fourth quarter. Invesco Ltd. now owns 59,604,857 shares of the e-commerce giant’s stock valued at $13,757,993,000 after acquiring an additional 1,879,630 shares during the last quarter. 72.20% of the stock is owned by institutional investors and hedge funds.

About Amazon.com

Amazon.com, Inc is a global technology and commerce company that operates online marketplaces, physical stores, and a broad portfolio of digital and cloud-based services. The company offers consumer products across categories such as electronics, household goods, apparel, groceries, and entertainment, while also providing third-party sellers with tools for listing, selling, and fulfilling orders.

Amazon’s major businesses include Amazon Web Services (AWS), which provides cloud computing, storage, database, analytics, and artificial intelligence services; Prime, a membership program that includes shipping, streaming, and other benefits; and digital entertainment services such as Prime Video, Amazon Music, Kindle, and Audible.