Amazon stock fell 7.30% after hours on Thursday to $225.99, from its $243.79 close. The drop left it below $230, the lowest of 42 analyst price targets tracked by TipRanks.
The sell-off came after a third-quarter miss on earnings and revenue. Free cash flow was negative for a second straight quarter. The 12-month outflow widened to $42.4 billion from $7.6 billion as AI spending climbed.
Amazon Missed Where Investors Were Looking
CNBC’s Investing Club said retail and advertising misses outweighed a strong quarter at Amazon Web Services (AWS).
- Earnings per share came in at $1.89, below the $1.96 LSEG consensus.
- Revenue reached $201.9 billion, short of the $202.3 billion estimate.
- Online store sales rose 2% to $68.5 billion, missing the $69.7 billion forecast, according to StreetAccount.
- Advertising revenue grew 11% to $19.6 billion, below the $20.8 billion estimate.
- Spending on property and equipment hit $77.3 billion, up from $35.1 billion a year earlier.
- Long-term debt climbed to $173.1 billion, from $65.6 billion at the end of 2025.
AWS revenue rose 39% to roughly $46 billion, ahead of estimates. Still, CNBC said investors may have looked for a bigger quarter-over-quarter increase after strong cloud results from Microsoft and Alphabet.
Wall Street’s Targets Now Sit Well Above the Stock
The stock’s reaction widened the gap between Amazon’s share price and Wall Street’s targets. Most of the 42 targets TipRanks tracks were set before Thursday’s report.
The average target of $332.26 sits about 47% above the after-hours price. Even the lowest, $230 target is above it. Morgan Stanley’s Brian Nowak set a $220 bear case this month, about $6 below the stock.
The ratings lean just as bullish. TipRanks counts 40 Buy and 2 Hold calls, with no Sell ratings.
What Could Close the Gap
Amazon’s own guidance offers the bullish case for those targets.
“Our AWS investment in functionality and infrastructure is working, with over 39% year-over-year revenue growth in Q3 ($184 billion revenue run rate) and projected revenue growth rates of over 40% both in 2027 and in 2028,” Andy Jassy, Amazon CEO, stated in the release.
Analysts expect AWS growth of 35.47% in 2027 and 34.8% in 2028, per CNBC. The AWS backlog also rose 16% in the quarter to $578 billion.
However, Amazon’s fourth-quarter operating income guidance has a $31 billion midpoint, below the $33 billion consensus. Jassy also expects to spend meaningfully more in 2027.
The Levels Friday’s Session Will Test
Friday’s regular session will show whether the after-hours drop holds. A close at or below $227.20 would leave the stock at least 20% under its $284 record close from August 3. Traders commonly treat a 20% drop from a peak as a bear market.
CNBC noted that at around $228, the stock had already erased its entire 15% gain from July’s report.
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