The Stock Of Amazon Falls After A Disappointing Sales Prediction

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Last Updated on October 29, 2022 by Bitfinsider

Shares of Amazon fell by more than eight percent on Friday, a day after the firm forecast that its sales during the holiday quarter would be significantly lower than anticipated.

Shares of Amazon have recovered some of the ground they lost earlier on Friday morning, when the company’s stock was down over half from its highs, resulting in a loss of approximately $940.8 billion to the company’s market worth.

According to Refinitiv, the business announced on Thursday that their revenue forecast for the final three months of the year would be between $140 billion and $148 billion. This is a significant decrease from the consensus expectation of $155.15 billion.

The revenue for the third quarter came in at $127.10 billion, which is an increase of 15% year over year but is significantly lower than the $127.46 billion that was anticipated by Wall Street. The cloud computing division of Amazon announced a revenue growth rate of 27.5% for the quarter. This represents the cloud business’s worst growth rate since the company began breaking out AWS data in 2014.

The results capped off a rocky earnings week for Big Tech, during which Amazon, Alphabet, Meta, and Microsoft all missed expectations for parts of their businesses, signaling how record inflation, rising interest rates, and fears of a recession are roiling their businesses. The results also signaled how record inflation is signaling how record inflation, rising interest rates, and fears of a recession are roiling their businesses. A number of businesses have released gloomy projections, suggesting that additional difficulties could be on the horizon.

On Friday, a number of analysts lowered their price forecasts for Amazon’s shares to reflect concerns about the immediate future. Others, though, have stated that they continue to have faith in the long-term prospects of the retail giant.

“Overall, while all of AMZN’s business units are likely exposed to broader macro pressures, we do not view 3Q results or 4Q guidance as thesis changing,” wrote Nicholas Jones of JMP Securities. He maintained his market outperform rating on Amazon shares but revised his price target down to $140 from $150. While he maintained his market outperform rating, Nicholas Jones lowered his price target.

According to what Jones wrote, “AMZN’s solutions within retail and cloud remain enticing offerings,” and “advertising continues to have a huge possibility for growth outside sponsored listings.” Both of these statements are true. Accordingly, “we believe AMZN as a best-in-class internet business that can not only weather the macro storm, but emerge poised to reaccelerate growth.” AMZN is an abbreviation for Amazon.com, Inc.

Deepak Mathivanan, an analyst at Wolfe Research, stated in a note that Amazon’s guidance for the fourth quarter demonstrates that the company is not immune to the adverse global macro environment.

According to Mathivanan, who maintained his outperform rating on Amazon shares but reduced his price target to $130 from $150, “however, we think the company is well positioned to navigate a choppy demand environment with minimal disruption to operations and potentially gain share from sub-scale players,” said Mathivanan. “We think the company is well positioned to navigate a choppy demand environment with minimal disruption to operations and potentially gain share from sub-scale players.”


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