Benzinga Pro data showed Amazon.com shares down 7.15% at $226.35 before Friday's market opening. Investors weighed faster cloud growth against sharply rising AI spending and increasing risks to retail operations. Amazon shares had fallen more than 4% on Thursday amid analyst concerns about capital spending, cash flow and AI shopping assistants. The Friday decline coincided with wider technology-sector weakness. Nasdaq futures dropped 2.35%. S&P 500 futures lost 0.99%.
Amazon generated $201.94 billion in third-quarter revenue, below Wall Street's $202.31 billion estimate. Earnings per share came to $1.89, missing expectations of $1.97. Revenue increased 12% from a year earlier. Amazon Web Services (AWS) sales climbed 39% to $46 billion, delivering the division's fastest growth in nearly five years. Amazon projected fourth-quarter revenue between $240 billion and $247 billion, against a consensus estimate of $244.51 billion. CEO Andy Jassy expects AWS revenue growth above 40% in both 2027 and 2028.
Blue Line Capital's Bill Baruch said Amazon's main challenge was establishing when capital spending would reach a peak. Baruch cited capital expenditures of approximately $220 billion this year and said investors needed clearer information about future spending. However, Baruch said AWS growth in the low-40% range could help the shares. Baruch identified Amazon's backlog of roughly $496 billion, Trainium chips and the Bedrock platform as possible catalysts.
Evercore ISI's Mark Mahaney described AWS growth as the key measure, alongside cloud margins and an expanding backlog. Mahaney warned that heavy AI investment had reduced free cash flow expectations for major cloud providers. However, Mahaney said Amazon appeared able to fund expansion, pointing to approximately $100 billion in debt raised during the preceding 12 months.
Maxim Group's Tom Forte retained a Buy rating and a $350 price forecast for Amazon. Forte warned that more expensive gasoline and pressure on consumers could hurt Amazon's holiday shopping results. Forte identified a possible DoorDash-Instacart combination as a competitive risk. Forte also highlighted increasing adoption of AI shopping assistants.
Deepwater Asset Management's Gene Munster said genuine retail concerns explained Amazon's share decline. Munster said personalized AI shopping bots could begin disrupting Amazon's business in late 2027. However, Munster interpreted Amazon's multiyear AWS growth forecast as an unusually strong indication that AI demand would persist. Munster said rising demand for Amazon's Trainium chips could pose a challenge to Nvidia Corp. Munster also said wider cloud expansion benefits providers of AI infrastructure.
Amazon Stock Falls Amid AI Spending Concerns and Missed Earnings
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Summary
Amazon shares fell 7.15% pre-market as fear and greed index signals caution over AI costs and retail risks. Q3 revenue came in at $201.94 billion, below estimates, with EPS at $1.89 versus $1.97 expected. AWS revenue hit $46 billion, up 39%, but analysts from Blue Line Capital, Evercore ISI, and Maxim Group pointed to capital spending concerns. Altcoins to watch may gain attention as investors shift focus amid market volatility.
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