Amazon extends decline to 6.6% during earnings call

Amazon extends decline to 6.6% during earnings call

Amazon (AMZN) reported its second quarter earnings after the bell on Thursday, with shares falling more than 6.6% following the report. The e-commerce giant beat expectations on the top and bottom lines, reporting earnings per share (EPS) of $1.68 on revenue of $167.7 billion, which exceeded Wall Street's anticipation of $1.33 EPS and $162.1 billion in revenue [2].

Despite the positive results, Amazon's stock declined significantly, primarily due to underperformance in its AWS (Amazon Web Services) segment. The company's AWS revenue hit $30.8 billion, just above the expected $30.7 billion, but this was a disappointment compared to the $34.2 billion reported by Microsoft's Azure business [2]. Additionally, Amazon's Q3 operating income guidance came in at $15.5 billion to $20.5 billion, which was below Wall Street's expectations of $19.5 billion [2].

The consumer segment of Amazon, however, performed better than expected, with online store sales reaching $61.4 billion, indicating that consumer demand remained resilient [2]. CEO Andy Jassy noted that the company has not seen any attenuation of demand at this point [2].

The decline in Amazon's stock price can be attributed to several factors, including the underwhelming performance of AWS and the company's conservative guidance for the third quarter. Additionally, the broader market's overbought conditions and the recent earnings beats by other tech giants like Microsoft may have contributed to the sell-off [3].

In summary, while Amazon's earnings report was largely positive, the stock's significant decline underscores the market's sensitivity to the performance of the AWS segment and the company's guidance for the future. Investors will continue to closely monitor Amazon's performance and guidance as the company navigates the challenges of the tech sector and the broader economic environment.

References:
[1] https://finance.yahoo.com/news/live/earnings-live-apple-tops-estimates-amazon-stock-slips-reddit-surges-205102706.html
[2] https://finance.yahoo.com/news/amazon-announces-q2-earnings-above-wall-street-expectations-better-than-expected-q3-guidance-172501759.html
[3] https://www.morningstar.com/news/marketwatch/20250731425/microsoft-and-meta-are-pushing-the-stock-market-into-even-more-overbought-territory