Amazon’s stock just plunged 8%, and here’s why everyone is talking about it. 📉
🚨 What Happened?
Amazon (AMZN) just dropped a bombshell. Their latest quarterly forecast didn’t hit the mark, sending their stock tumbling 8% in Friday afternoon trading. The tech world and the broader market took a hit too, thanks to a lackluster July jobs report.
📊 By the Numbers
- Sales Forecast: Amazon predicts third-quarter sales between $154 billion and $158.5 billion, missing the $158.43 billion mark that analysts hoped for.
- Operating Income: Expected to be between $11.5 billion and $15 billion, while Wall Street was eyeing $15.2 billion.
Even though Amazon reported an EPS of $1.26 (beating the $1.04 estimate and nearly doubling profits from last year), investors were still bummed about the less-than-stellar outlook.
💸 Revenue Breakdown
- Total Revenue: $148 billion, just shy of the $148.8 billion target.
- Ad Revenue: $12.8 billion, missing the $13 billion expectation.
- AWS: The bright spot! AWS brought in $26.3 billion, smashing the $22.1 billion from last year and beating the $26 billion forecast.
Amazon CFO Brian Olsavsky noted that AWS is on track to rake in over $105 billion annually. The company’s heavy investments in AI and cloud services, with over $30 billion spent in the first half of the year, reflect their ambitious growth plans.
🛍️ E-commerce Showdown
Amazon is feeling the heat from rivals like Temu and Shein, known for their low-cost, direct-from-factory goods. In response, Amazon is gearing up to launch its own discount digital storefront to compete in the fashion and lifestyle space.
“We are seeing cautious consumers,” Olsavsky said. “They are looking for deals.”
🔍 Market Reactions
Sky Canaves, principal analyst at eMarketer, pointed out that Amazon’s growth was stunted by softer consumer spending, squeezed between major sales events like the Big Spring Sale in March and Prime Day in July. To keep up, Amazon might launch a Temu-style discount section for the holidays.
⚔️ Big Tech Showdown
Amazon’s news comes on the heels of mixed results from other tech giants:
- Microsoft (MSFT): Beat expectations overall but missed on cloud revenue.
- Google (GOOG): Disappointed with lower-than-expected YouTube ad revenue.
- Meta (META): Nailed it with better-than-expected revenue and profit.
- Apple (AAPL): Exceeded expectations despite a drop in iPhone sales.
Stay tuned for more updates on Amazon’s rollercoaster ride and what’s next for the tech giant! 🚀