Amazon ( (AMZN) ) has fallen by -13.43%. Read on to learn why.
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Forget margin or options. Here's how the pros trade AMZNAmazon shares slid 13.43% over the past week as investors reacted nervously to the company’s aggressive new spending plans, despite solid recent results and upbeat long‑term forecasts. The stock now trades well below Wall Street’s average 12‑month price target, as the market grapples with a sharp jump in planned capital expenditure — around $200 billion by 2026 — and concerns that free cash flow could turn negative before those investments start to pay off. Guidance for weaker near‑term operating income, especially in the coming quarter, has added to pressure on the share price.
Most analysts remain firmly bullish on Amazon, arguing that the sell‑off is more about timing than fundamentals. They highlight a powerful growth story in Amazon Web Services (AWS), which is seeing accelerating demand from artificial intelligence and cloud computing, record quarterly revenue growth, and a swelling backlog of long‑term contracts. Several top‑ranked analysts forecast AWS revenue and profit roughly doubling in the next few years, pushing Amazon’s earnings sharply higher and leaving the stock trading at what they see as a discount to other large tech names if those projections prove accurate.
The divide between the market and Wall Street centers on how quickly Amazon can turn its heavy spending into higher profits. New investments span AI infrastructure, custom chips, data centers, faster global delivery, and international retail initiatives like the Leo project. While some analysts have trimmed targets or even downgraded the stock to Hold on near‑term cash flow worries, the consensus still calls Amazon a Strong Buy and sees substantial upside from current levels. For investors, the recent 13.43% drop reflects short‑term anxiety over cash burn, set against a long‑term bet that Amazon’s AI and cloud push will eventually reward patient shareholders.