Amazon.com (NASDAQ:AMZN) Stock Falls 1.4% on Disappointing Earnings

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

The e-commerce giant reported $1.89 earnings per share for the quarter, missing analysts’ consensus estimates of $1.97 by ($0.08). Amazon.com had a net margin of 17.44% and a return on equity of 18.00%. The firm had revenue of $201.94 billion during the quarter, compared to analysts’ expectations of $202.22 billion. During the same quarter in the prior year, the business earned $1.95 EPS. The company’s quarterly revenue was up 12.1% compared to the same quarter last year.

Key Headlines 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 equities analysts recently commented on the company. Telsey Advisory Group reiterated an “outperform” rating and issued a $335.00 target price on shares of Amazon.com in a research note on Friday. Yorkville Ives assumed coverage on Amazon.com in a research note on Monday, October 19th. They issued an “outperform” rating and a $300.00 price target on the stock. The Goldman Sachs Group restated a “conviction-buy” rating and issued a $370.00 price target on shares of Amazon.com in a report on Friday. Weiss Ratings reiterated a “buy (b)” rating on shares of Amazon.com in a report on Monday, August 3rd. Finally, Robert W. Baird set a $310.00 target price on shares of Amazon.com and gave the stock an “outperform” rating in a research report on Friday, July 31st. One equities research analyst has rated the stock with a Strong Buy rating, fifty-six have given a Buy rating and three have given a Hold rating to the company. According to MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $320.86.

Insider Activity

In other news, SVP David Zapolsky sold 9,258 shares of the company’s stock in a transaction that occurred 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 completion of the transaction, the senior vice president directly owned 41,190 shares of the company’s stock, valued at approximately $10,699,926.30. This represents a 18.35% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Douglas Herrington sold 1,000 shares of the firm’s stock in a transaction that occurred on Thursday, October 1st. The shares were sold at an average price of $251.50, for a total transaction of $251,500.00. Following the completion of the sale, the chief executive officer owned 474,681 shares in the company, valued at $119,382,271.50. The trade was a 0.21% 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 have sold 71,589 shares of company stock valued at $18,580,515 over the last quarter. 8.90% of the stock is owned by company insiders.

Institutional Investors Weigh In On Amazon.com

A number of institutional investors have recently added to or reduced their stakes in the company. State Street Corp raised its holdings in shares of Amazon.com by 5.5% during the second quarter. State Street Corp now owns 411,848,346 shares of the e-commerce giant’s stock valued at $95,504,904,000 after acquiring an additional 21,398,025 shares during the period. Bank of America Corp DE acquired a new position in shares of Amazon.com in the second quarter worth $22,218,775,000. Bank of New York Mellon Corp acquired a new position in shares of Amazon.com in the second quarter worth $16,341,405,000. Amundi raised its holdings in shares of Amazon.com by 3.9% during the second quarter. Amundi now owns 63,822,242 shares of the e-commerce giant’s stock worth $15,211,393,000 after acquiring an additional 2,421,739 shares in the last quarter. Finally, Legal & General Group Plc purchased a new stake in shares of Amazon.com during the 2nd quarter worth about $12,831,376,000. 72.20% of the stock is currently owned by institutional investors and hedge funds.

Amazon.com Price Performance

The company 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. The company has a debt-to-equity ratio of 0.23, a quick ratio of 0.87 and a current ratio of 1.03. The stock has a 50 day moving average price of $254.67 and a two-hundred day moving average price of $243.12.

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.