Amazon Stock: Why One Analyst Says to Buy the Earnings Dip
Amazon stock is lower Friday after the company reported earnings, but Wall Street isn't worried.
Amazon.com (AMZN) stock is plummeting Friday after the world's largest e-commerce company reported mixed earnings results for its second quarter and issued a third-quarter outlook that came up short of analysts' estimates.
In the three months ended June 30, Amazon's revenue increased 10% year-over-year to $148 billion, driven by a 19% year-over-year rise in its Amazon Web Services (AWS) cloud segment to $26.3 billion. The company said earnings per share (EPS) nearly doubled from the year-ago period to $1.26.
"We're continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth," Amazon CEO Andy Jassy said in a statement.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While Amazon's results for AWS revenue and earnings per share came in above the $26 billion and $1.03 analysts were expecting, respectively, total revenue fell short of the $148.6 billion Wall Street forecast, according to CNBC.
For the third quarter, Amazon said it anticipates revenue in the range of $154 billion to $158.5 billion, representing growth of 8% to 11% from the same period a year ago. However, the midpoint of this range, $156.25 billion, is lower than analysts' estimates for $158.24 billion in sales.
Is Amazon stock a buy, sell or hold?
Wall Street is bullish on the Dow Jones stock, and for good reason. Heading into today's session, Amazon was up 21% for the year to date, building on its impressive 20-year return.
According to S&P Global Market Intelligence, the average analyst target price for AMZN stock is $221.92, representing implied upside of nearly 40% to current levels. Additionally, the consensus recommendation is Strong Buy.
Financial services firm Wedbush is one of the more bullish outfits on AMZN stock with an Outperform rating (equivalent to a Buy) and $225 price target.
"Despite a mixed backdrop near-term, we would be buyers of the pullback in Amazon shares following Q2 results," said Wedbush analyst Scott Devitt in a note Friday morning. "Our long-term thesis is unchanged, Amazon is positioned to deliver sustainable operating margin growth over a multi-year period that exceeds mega-cap peers including Meta (Outperform-rated) and Alphabet (Outperform-rated)."
Devitt adds that “Amazon remains our Best Idea."
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
US-China Trade Hopes Send Stocks to New Highs: Stock Market TodayApple and Microsoft are on track to join Nvidia in the $4 trillion market cap club.
-
A Lesson From the School of Rock About the MarketsIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
US-China Trade Hopes Send Stocks to New Highs: Stock Market TodayApple and Microsoft are on track to join Nvidia in the $4 trillion market cap club.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and AroundIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's StepsTax-loss harvesting can offer more advantages for investors than tax relief. Over the long term, it can potentially help you maintain a robust portfolio and build wealth.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
Dow Adds 472 Points After September CPI: Stock Market TodayIBM and Advanced Micro Devices created tailwinds for the main indexes after scoring a major quantum-computing win.
-
October Fed Meeting: Live Updates and CommentaryThe October Fed meeting is a key economic event, with Wall Street waiting to see what Fed Chair Powell & Co. will do about interest rates.