Amazon.com (NASDAQ:AMZN) Shares Down 1.7% – Here’s What Happened

Amazon.com, Inc. (NASDAQ:AMZN)’s share price dropped 1.7% during trading on Wednesday. The company traded as low as $252.66 and last traded at $254.08. Approximately 33,414,283 shares changed hands during mid-day trading, a decline of 28% from the average daily volume of 46,324,363 shares. The stock had previously closed at $258.58.

Trending Headlines about Amazon.com

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

• Positive Sentiment: AWS and AI demand remain key bullish catalysts. AWS’s reported backlog has reached approximately $496 billion, while cloud margins have expanded to about 39%. Amazon is also considering a roughly $7 billion acquisition of AI startup Decart, which could improve the performance of workloads running on both Nvidia and Amazon’s custom chips. AWS backlog and cloud margins article
• Positive Sentiment: Prime Video is pursuing greater engagement. Amazon is making multibillion-dollar investments in live sports rights, theatrical films and channel distribution to strengthen Prime’s value proposition and increase customer engagement. Amazon live sports strategy article
• Neutral Sentiment: Investors are focused on the upcoming third-quarter earnings report. Expectations include continued AWS acceleration and improving operating cash flow, but heavy AI infrastructure spending is likely to pressure near-term free cash flow and margins. Amazon AI spending and earnings article
• Negative Sentiment: Lawmakers are seeking a site-specific FAA environmental review of Amazon’s proposed Prime Air drone hub near Boston. Concerns include noise, privacy, public safety, environmental effects and lithium-ion battery fires. The review request could delay the facility and adds regulatory uncertainty. FAA review of Amazon drone hub article
• Negative Sentiment: Analyst price-target reductions are adding pressure ahead of earnings. The revisions reflect concerns that Amazon’s approximately $200 billion-plus AI and data-center spending plan could weigh on cash generation and returns before the investments produce sufficient growth. Amazon analyst price-target article

Analyst Upgrades and Downgrades

A number of analysts have recently issued reports on the company. HSBC reiterated a “buy” rating and set a $310.00 target price on shares of Amazon.com in a report on Friday, July 31st. Cantor Fitzgerald cut their price target on shares of Amazon.com from $320.00 to $310.00 and set an “overweight” rating on the stock in a report on Monday. Telsey Advisory Group set a $335.00 price target on shares of Amazon.com and gave the company an “outperform” rating in a research report on Friday, July 31st. DA Davidson reiterated a “neutral” rating and set a $250.00 price objective on shares of Amazon.com in a research note on Friday, July 31st. Finally, UBS Group set a $200.00 price objective on shares of Amazon.com in a research report on Thursday, September 17th. Fifty-six research analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $322.53.

Amazon.com Stock Performance

The company has a debt-to-equity ratio of 0.23, a quick ratio of 0.87 and a current ratio of 1.03. The company has a market capitalization of $2.74 trillion, a PE ratio of 20.44, a PEG ratio of 2.01 and a beta of 1.45. The company has a 50 day moving average price of $257.96 and a 200 day moving average price of $250.86.

Amazon.com (NASDAQ:AMZN) last released its earnings results on Thursday, July 30th. The e-commerce giant reported $5.75 earnings per share for the quarter, topping the consensus estimate of $1.82 by $3.93. The company had revenue of $200.61 billion during the quarter, compared to the consensus estimate of $197.03 billion. Amazon.com had a net margin of 17.44% and a return on equity of 18.00%. The company’s revenue was up 19.6% on a year-over-year basis. During the same quarter in the previous year, the firm earned $1.68 EPS. Equities analysts forecast that Amazon.com, Inc. will post 8.03 EPS for the current year.

Insider Activity at Amazon.com

In related news, VP Shelley Reynolds sold 2,343 shares of the firm’s stock in a transaction that occurred on Friday, August 21st. The stock was sold at an average price of $259.01, for a total value of $606,860.43. Following the sale, the vice president owned 119,780 shares of the company’s stock, valued at approximately $31,024,217.80. This trade represents a 1.92% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Douglas J. Herrington sold 1,000 shares of the stock in a transaction dated Thursday, October 1st. The stock was sold at an average price of $251.50, for a total transaction of $251,500.00. Following the completion of the sale, the chief executive officer directly owned 474,681 shares in the company, valued at approximately $119,382,271.50. This trade represents a 0.21% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 71,589 shares of company stock valued at $18,580,515 in the last ninety days. 8.90% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in the business. Consilium Wealth Advisory LLC raised its stake in shares of Amazon.com by 2.0% during the third quarter. Consilium Wealth Advisory LLC now owns 27,788 shares of the e-commerce giant’s stock valued at $6,923,000 after purchasing an additional 550 shares in the last quarter. Investment Planning Advisors Inc. grew its position in Amazon.com by 15.0% in the third quarter. Investment Planning Advisors Inc. now owns 4,783 shares of the e-commerce giant’s stock worth $1,192,000 after buying an additional 623 shares during the last quarter. Lodestone Wealth Management LLC raised its position in shares of Amazon.com by 5.3% during the third quarter. Lodestone Wealth Management LLC now owns 14,491 shares of the e-commerce giant’s stock worth $3,610,000 after purchasing an additional 732 shares during the period. N10 Wealth LLC lifted its stake in Amazon.com by 36.3% during the third quarter. N10 Wealth LLC now owns 95,433 shares of the e-commerce giant’s stock valued at $23,777,000 after buying an additional 25,419 shares in the last quarter. Finally, ABLE Financial Group LLC boosted its stake in Amazon.com by 4.9% in the 3rd quarter. ABLE Financial Group LLC now owns 30,393 shares of the e-commerce giant’s stock worth $7,572,000 after purchasing an additional 1,422 shares during the period. Institutional investors and hedge funds own 72.20% of the company’s stock.

About Amazon.com

Amazon.com, Inc is a global technology and commerce company that operates online marketplaces, physical stores, and a broad portfolio of digital and cloud-based services. The company offers consumer products across categories such as electronics, household goods, apparel, groceries, and entertainment, while also providing third-party sellers with tools for listing, selling, and fulfilling orders.

Amazon’s major businesses include Amazon Web Services (AWS), which provides cloud computing, storage, database, analytics, and artificial intelligence services; Prime, a membership program that includes shipping, streaming, and other benefits; and digital entertainment services such as Prime Video, Amazon Music, Kindle, and Audible.