Amazon.com (NASDAQ:AMZN) Announces Quarterly Earnings Results, Misses Estimates By $0.08 EPS

Amazon.com (NASDAQ:AMZN) released its quarterly earnings results on Thursday. The e-commerce giant reported $1.89 earnings per share for the quarter, missing analysts’ consensus estimates of $1.97 by ($0.08), FiscalAI reports. Amazon.com had a return on equity of 16.94% and a net margin of 16.90%. The company 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 company earned $1.95 EPS. The firm’s revenue was up 12.1% compared to the same quarter last year.

Here are the key takeaways from Amazon.com’s conference call:

• Amazon delivered record profitability: Q3 revenue rose 12% to $201.9 billion, while operating income increased 61% to $28.1 billion, producing a record 13.9% operating margin.
• AWS growth accelerated sharply to 39.3%, with $46 billion in quarterly revenue and a $184 billion annualized run rate. Management expects AWS to grow more than 40% in both 2027 and 2028 and believes it could become a $1 trillion-plus business within five to 10 years.
• AI demand remains exceptionally strong across Bedrock, custom chips, inference, and agents; AWS backlog reached $578 billion, while Bedrock token volume grew nearly 17 times year over year and Fortune 500 spending on the service nearly septupled.
• Amazon is committing heavily to infrastructure, with roughly $220 billion of 2026 cash CapEx and meaningfully higher spending expected in 2027. Management expects attractive long-term returns, but AI growth and higher component costs could pressure AWS margins, which were 38.7% in Q3.
• Retail operations continued to improve, with units up nearly 15% year over year, faster delivery, lower cost to serve, and strong grocery and pharmacy adoption. Q4 net sales are forecast at $240 billion to $247 billion, while advertising growth is expected to return to the high teens after timing-related Q3 headwinds.

Amazon.com Stock Performance

Amazon.com stock opened at $240.35 on Friday. Amazon.com has a 52 week low of $196.00 and a 52 week high of $287.20. The company has a current ratio of 1.03, a quick ratio of 0.87 and a debt-to-equity ratio of 0.23. The stock has a market cap of $2.59 trillion, a P/E ratio of 19.43, a price-to-earnings-growth ratio of 1.89 and a beta of 1.45. The stock has a 50 day moving average of $254.28 and a 200-day moving average of $243.09.

Amazon.com News Summary

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

• Positive Sentiment: AWS growth accelerated significantly. Amazon Web Services revenue rose 39% to approximately $46 billion, its fastest growth in nearly five years. Management said AWS could grow more than 40% annually in 2027 and 2028, supported by AI demand, a large backlog and rising cloud workloads. Analysts including JPMorgan, Canaccord, Monness and RBC maintained bullish ratings or targets, viewing AWS as a potential long-term, trillion-dollar business. AWS growth hits 39 percent
• Positive Sentiment: Amazon continues expanding its AI and adjacent businesses. The company plans to sell its Trainium AI chips externally by late 2027, while Amazon Pharmacy users increased more than 60% year over year and Prime Video reportedly reached profitability. Management also highlighted longer-term opportunities in retail automation, satellite internet and AI infrastructure. Amazon Trainium AI chips
• Neutral Sentiment: Analyst sentiment remains broadly constructive, but targets were trimmed. Several firms reaffirmed Buy or Outperform ratings, with targets generally well above the current trading level. However, Wells Fargo, Morgan Stanley, Wedbush, Scotiabank, Cantor Fitzgerald and others lowered targets, signaling reduced near-term confidence after the earnings release. Amazon price target changes
• Negative Sentiment: Amazon missed both major Q3 estimates. Earnings per share came in at $1.89 versus roughly $1.97–$2.01 expected, while revenue was $201.94 billion compared with about $202.2 billion anticipated. Fourth-quarter revenue guidance was also viewed as soft, raising concerns about holiday-season retail demand. Amazon fourth-quarter guidance
• Negative Sentiment: AI investment is pressuring cash flow and leverage. Amazon spent about $77 billion on property and equipment in Q3 and continues targeting approximately $220 billion in 2026 capital expenditures. Trailing free cash flow fell to a $42.4 billion deficit, while long-term debt increased substantially. Investors are questioning when the spending will generate adequate returns, overshadowing AWS’s strong growth. Amazon AI spending concerns
• Negative Sentiment: Broader technology-sector weakness amplified the selling. Amazon’s report contributed to a wider Nasdaq decline as investors reconsidered whether massive AI infrastructure spending across Big Tech can produce timely profits. Concerns about AI-related debt, cash burn and valuation affected sentiment beyond Amazon itself. Nasdaq and AI spending concerns

Analyst Ratings Changes

AMZN has been the topic of a number of recent research reports. JPMorgan Chase & Co. boosted their target price on shares of Amazon.com from $330.00 to $365.00 and gave the stock an “overweight” rating in a research report on Friday, July 31st. Sanford C. Bernstein restated an “outperform” rating and issued a $320.00 target price (up from $315.00) on shares of Amazon.com in a research note on Friday, July 31st. Royal Bank Of Canada reaffirmed an “outperform” rating and set a $330.00 price target on shares of Amazon.com in a report on Friday. Citigroup reaffirmed a “market outperform” rating on shares of Amazon.com in a research note on Friday. Finally, HSBC reaffirmed a “buy” rating and set a $310.00 price target on shares of Amazon.com in a research note on Friday, July 31st. One research analyst has rated the stock with a Strong Buy rating, fifty-six have assigned a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $320.86.

Insiders Place Their Bets

In other Amazon.com news, CEO Matthew Garman sold 14,541 shares of the stock in a transaction on Friday, August 21st. The shares were sold at an average price of $259.06, for a total transaction of $3,766,991.46. Following the transaction, the chief executive officer directly owned 17,794 shares in the company, valued at $4,609,713.64. This represents a 44.97% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP David Zapolsky sold 9,258 shares of the firm’s 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 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 disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 71,589 shares of company stock valued at $18,580,515. 8.90% of the stock is owned by insiders.

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.