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.
Sign up for Kiplinger’s Free E-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
-
Ten Cheapest Places to Live in TexasProperty Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for YouAI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or RelocateHomeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and FriendsWhat starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
Stock Market Today: Good Feelings and Solid Data Lift StocksResilience and de-escalation defined another generally positive day for financial markets.
-
What the HECM? Combine It With a QLAC and See What HappensCombining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
721 UPREIT DSTs: Real Estate Investing Expert Explores the Hidden RisksPotential investors need to understand the crucial distinction between a REIT's option to buy a Delaware statutory trust's property and its obligation.
