Amazon Earnings Mixed, But Analysts See Upside Ahead

# Amazon Stock Analysis: Mixed Reactions to Q2 Earnings Despite Strong Revenue

Discover why Amazon shares closed at $188.88, falling below price targets despite exceeding Q2 revenue expectations of $167 billion and EPS of $1.68. Our latest podcast episode analyzes the 8% stock slide triggered by AWS's 18% growth that failed to accelerate, raising concerns as Microsoft Azure and Google Cloud gain momentum. We explore Wall Street's optimistic outlook with new price targets from JP Morgan ($265), Citi ($270), and UBS ($271), suggesting 15-23% upside potential. Learn about Amazon's massive $31 billion capital expenditure on cloud infrastructure and AI, and how recent innovations in AI and wearable technology could impact long-term growth despite short-term volatility. Essential listening for investors navigating Amazon's complex market position and future prospects.

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Episode Transcript

Speaker 1 (00:00):
Amazon shares closed at approximately one hundred eighty eight United
States dollars in eighty eight cents on the latest trading day,
following a notable period of volatility. This places the stock
somewhat below recent forecasts and price targets, reflecting mixed reactions
to the company's second quarter earnings announcement. Trading volume has
been elevated in recent days, indicating heightened investor interest and

(00:24):
response to the company's results and management commentary. In the
most recent quarterly report, released at the end of July,
Amazon reported revenue exceeding one hundred sixty seven billion United
States dollars and earnings per share of one dollar and
sixty eight cents, both figures surpassing Wall Street estimates. Despite

(00:46):
beating expectations, the company's guidance for third quarter operating income
ranged from fifteen to one half to twenty and one
half billion United States dollars, with the lower end viewed
as disappointing by some investors. The main factor cited in
the stock's eight percent slide was Amazon Web Services, which
posted eighteen percent year over year revenue growth to more

(01:09):
than thirty billion United States dollars, but did not accelerate
beyond the prior quarter, leaving some analysts concerned about competitive
dynamics as Microsoft Azure and Google Cloud outpaints Amazon's cloud division.
Wall Street sentiment, however, remains broadly positive. Price targets have
been raised following the results, with J. P. Morgan now

(01:31):
forecasting two hundred sixty five United States dollars, City two
hundred seventy United States dollars, and UBS two hundred seventy
one United States dollars, all suggesting upside between fifteen and
twenty three percent from current levels over the next twelve months.
The consensus among more than seventy analysts stands at a

(01:52):
median expectation of two hundred and fifty two United States
dollars per share in a year. Many analysts argue that
ongoing capital expenditures thirty one billion United States dollars last quarter,
largely for cloud infrastructure and artificial intelligence, are necessary and
support future growth, although some debate whether the scale is

(02:13):
fully justified. Recent news also highlights Amazon's continued innovation, including
a major expansion of artificial intelligence infratructure and new moves
in wearable technology. Overall, while near term share price movement
has reflected Earning's anxieties. The longer term outlook is supported
by continued revenue growth, leadership in cloud computing, and widespread

(02:36):
analyst optimism.