Amazon stock trading lower after missing revenue estimates and weak Q3 guidance, but presents long-term opportunity

From Nasdaq: 2024-08-02 15:45:21

The Q2 earnings season for the “Magnificent 7” stocks had a mixed outcome. Meta Platforms (META) stood out with impressive numbers, while Apple (AAPL) and Amazon (AMZN) reported their earnings post-close. AAPL is trading higher after beating earnings, while AMZN is trading lower due to missing revenue estimates and weak Q3 guidance.

AWS saw a 19% YoY growth, but online store sales only grew by 5%. Amazon’s advertising business grew by 20%, but slightly missed consensus estimates. The Q3 revenue forecast of $154-$158.5 billion and operating income guidance of $11.5-$15 billion fell short of analyst projections, leading to disappointment in the markets.

Despite the short-term setbacks, Amazon stock presents a buying opportunity for long-term investors. AWS’s growth is stabilizing and accelerating, fueled by trends like new initiatives, transitions to the cloud, and demand for AI. The advertising business, e-commerce pivot, and unexplored opportunities like pharmacy and B2B segments offer further growth potential.

The uncertain macro environment has impacted consumer behavior, but Amazon’s presence in high-growth sectors like e-commerce, cloud, AI, streaming, and digital advertising positions it as a buy-the-dip candidate. With promising forecasts for the future, Amazon remains an attractive investment for the long haul with reasonable valuations.



Read more at Nasdaq: Amazon Stock 2025 Forecast: Why It Makes Sense to Buy the Dip in AMZN