Title:
Amazon Stock Plunges 12% After Rare Revenue Miss: Is It Time to Buy?
Meta Description:
Amazon stock tumbles 12% after missing revenue estimates, but net sales still up 10%. Find out if now is the right time to invest in Amazon.
Content:
Amazon (NASDAQ:) stock took a nosedive on Friday, plummeting over 12% following a rare revenue miss. Despite falling short of revenue estimates, the e-commerce giant reported a 10% increase in net sales for the second quarter.
The company’s revenue for the quarter reached $148 billion, a 10% rise from the same period last year. However, analysts had anticipated a median revenue of $148.7 billion, leading to the stock’s sharp decline.
On a positive note, Amazon’s net income doubled year-over-year to $13.5 billion, with earnings per share surpassing expectations at $1.29. This increase was attributed to both revenue growth and effective cost management, as expenses only rose by 5% in the quarter.
Amazon’s e-commerce segments in North America and internationally saw sales rise by 9% and 7% respectively, although at a slower pace compared to the previous quarter. Additionally, Amazon Web Services (AWS) experienced a robust quarter, with a 19% year-over-year revenue increase to $26.3 billion.
Looking ahead, Amazon projects net sales between $154.0 billion and $158.5 billion for the third quarter, with anticipated growth of 8% to 11%. The upcoming quarter is expected to be strong, driven by the success of Prime Day and new content releases.
Despite the stock’s sharp decline, analysts remain bullish on Amazon, with a median target price of $220 per share. The recent correction presents a buying opportunity for investors, as the stock’s valuation has become more reasonable.
In conclusion, while there may be continued volatility in the market, investing in Amazon at its current price level or lower could prove to be a wise decision in the long run.
Analysis:
- Amazon stock plunged 12% after missing revenue estimates, but net sales were still up 10%.
- The company’s effective cost management led to a doubling of net income year-over-year.
- Analysts are optimistic about Amazon’s future growth potential, with a median target price of $220 per share.
- Despite short-term market fluctuations, investing in Amazon at the current price level presents a buying opportunity for long-term investors.