Amazon to Release Quarterly Earnings Today as Stock Falls 2%
Amazon spent billion on AI development, and that may come back to bite them in this week's earnings report.
Quick overview
- Amazon is set to announce its quarterly earnings amid a challenging earnings season for tech stocks.
- The company's stock fell 2% in premarket trading due to concerns over high AI investment costs.
- Despite predictions of record revenue around $211 billion, investor focus will be on capital expenditures and future guidance.
- Analysts still consider Amazon a buy, but the stock's recent volatility raises concerns about its performance post-earnings.
Amazon (AMZN) is set to reveal their quarterly earnings for Thursday during a contentious earnings season that has seen several other Magnificent Seven stocks plummet.
The price of Amazon stock fell 2% on Thursday in premarket trading ahead of the release of the company’s quarterly earnings. Investors may be worried that Amazon will fail to impress due to the high cost of artificial intelligence investments.
Amazon may be reporting a record quarterly high of around $211 billion, but concerns over $125 billion in AI spending are likely to put a damper on any celebrations. What investors and shareholders will be looking at as well is the company’s guidance moving forward. Will they continue to sacrifice profits for AI development or assuage shareholder fears by changing their focus?
Amazon Stock Slips
Before the company released their Q4 earnings statement Thursday, their stock slipped from $232 to $225. January was uneven for the company, with little upward progress early on and a steep decline as the month closed off. This may indicate that investors are not very confident that Amazon can impress with their earnings report.
The market will be looking at the company’s capital expenditures and how much their investments have cut into their profits. Their free cash flow and margins are also vitally important, especially in the wider scope of the tech earnings season. So far this season, only Meta Platforms (META) has managed to impress investors from the round of major tech earnings releases.
Amazon stock has been trading sideways for months, and they have to make an excellent showing today if they are going to turn the tide of investor sentiment back in favor of tech stocks. But Wall Street analysts consider this stock a buy. That could be because it has been slipping lately and is due for a comeback as a generally strong performer. However, investors need to be aware that tech stocks are volatile at the moment, especially close to earnings reports.
Revenue predictions for Amazon this last quarter are between $211.3 and $211.6 billion, and if that holds true, then the company will have experienced about 13% growth from year to year. The company is also expected to produce EPS around $197, and that would be a big step up from last year’s Q4 EPS of $1.86. If the past two weeks of earnings reports are any indication, Amazon needs to really impress its investors with more than just revenue numbers in order for their stock to climb this week.
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