Amazon Stock Dips 2.5% ahead of Earnings Report
Amazon is ready to post earnings for the most recent quarter but their stock is down slightly ahead of the report.
Quick overview
- Amazon's stock fell 2.55% ahead of its upcoming earnings report, causing investor concern.
- UBS raised its price target for Amazon from $310 to $311, recommending it as a buy despite the stock dip.
- Amazon is expected to report significant capital expenditures and earnings growth, which could shift negative sentiment in the tech sector.
- Wall Street estimates predict earnings per share of $1.98 and revenue of $211 billion for the fourth quarter.
Investors seem skittish about Amazon’s (AMZN) upcoming earnings report this week as the stock price fell 2.55% on Tuesday, two days before the earnings report is due.
Amazon stock may be down, but Swiss investment service UBS raised their price target for this stock from $310 to $311, and they say investors should buy. After all, this stock has grown more than 7% over the last month.
On Thursday, Amazon will report for their most recent fiscal quarter during a very busy earnings report season for Magnificent Seven stocks like this one and other major players. Alphabet (GOOGL) is releasing their earnings report this week as well, following last week’s reports from Microsoft (MSFT), Apple (AAPL), and Meta Platforms (META).
Why Amazon May Impress Slightly
Data coming from Wall Street for Amazon says that the ecommerce giant improved their revenue from Amazon Web services and increased capital expenditures. Like many of the big tech companies, they are putting millions and even billions into the development of artificial intelligence and other cutting edge technology, which has taken a serious bite out of their profits.
Amazon needs to impress its shareholders this week and show that they can be profitable while still keeping ahead of tech trends. Artificial intelligence was supposed to save companies money on resources and payroll, but for now, the needed chips are incredibly expensive and development costs are sky high. Throughout November and December of last year, investors and shareholders began to demand more profitability from tech companies that were investing heavily into AI and other bleeding edge technology, causing a bearish stock trend.
Amazon is expected to report around $344 billion for capital expenditures for the fourth quarter, up from the previously expected $300 billion. If Amazon can demonstrate excellent free cashflow and strong profitability, they will help to shift the tide of negative sentiment against AI-related tech companies. The stock market indices are near all-time highs, but investors are pulling back from tech stocks during a mixed earnings season. It is partly up to Amazon to change things for the tech niche.
Wall Street estimates say that Amazon will post earnings per share of around $1.98. If they do, that would mean a growth from the same time last year of about 6.5%. For revenue, the estimates call for $211 billion, which is a jump of about 12.6% compared to the same fourth quarter from 2025. Even though the retailer’s stock is pulling back right now, it could climb on Wednesday ahead of the earnings report.
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