Amazon.com (NASDAQ:AMZN) Stock Price Down 2.3% After Analyst Downgrade

Shares of Amazon.com, Inc. (NASDAQ:AMZN) dropped 2.3% during trading on Tuesday after Phillip Securities downgraded the stock from a strong-buy rating to a moderate buy rating. The stock traded as low as $275.82 and last traded at $277.42. 67,682,915 shares traded hands during mid-day trading, an increase of 34% from the average session volume of 50,469,727 shares. The stock had previously closed at $284.02.

A number of other equities analysts have also weighed in on the company. DA Davidson reiterated a “neutral” rating and set a $250.00 price objective on shares of Amazon.com in a research note on Friday. Wells Fargo & Company restated an “overweight” rating and issued a $328.00 target price (up from $322.00) on shares of Amazon.com in a research note on Friday. Piper Sandler reaffirmed an “overweight” rating and set a $320.00 target price (up from $315.00) on shares of Amazon.com in a report on Friday. TD Securities upgraded Amazon.com to a “buy” rating in a research report on Monday, April 13th. Finally, HSBC reissued a “buy” rating and issued a $310.00 price target on shares of Amazon.com in a report on Friday. Fifty-six research analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average price target of $322.56.

Insiders Place Their Bets

In other news, CEO Douglas J. Herrington sold 6,370 shares of the stock in a transaction dated Thursday, May 21st. The shares were sold at an average price of $262.39, for a total value of $1,671,424.30. Following the completion of the sale, the chief executive officer directly owned 486,527 shares in the company, valued at $127,659,819.53. This represents a 1.29% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Shelley Reynolds sold 2,363 shares of the stock in a transaction dated Thursday, May 21st. The shares were sold at an average price of $262.38, for a total transaction of $620,003.94. Following the completion of the sale, the vice president owned 119,780 shares of the company’s stock, valued at approximately $31,427,876.40. The trade was a 1.93% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 76,867 shares of company stock valued at $20,253,702. 8.90% of the stock is owned by corporate insiders.

Amazon.com News Roundup

Here are the key news stories impacting Amazon.com this week:

• Positive Sentiment: Investor sentiment remains supported by Amazon’s strong second-quarter results: revenue reached approximately $200.6 billion, while AWS revenue grew 37% and operating income increased sharply. The results eased concerns that heavy AI infrastructure spending would fail to generate returns. Amazon enters $3 trillion club as AI optimism sweeps through Wall Street
• Positive Sentiment: Analysts continue to highlight AWS demand, a large contracted backlog and improving margins as evidence that Amazon’s AI investments are becoming commercially productive. Several firms have raised price targets, with reported targets extending well above the current trading range. Amazon Stock Gains Fuel Uptrend: Wall Street Focuses on AWS Backlog
• Positive Sentiment: Short sellers had built unusually large positions before earnings, and the subsequent earnings beat triggered covering that helped drive Amazon’s recent rally. Continued covering could provide support, although some of the easiest gains may already have occurred. Short sellers piled into Amazon and Microsoft before earnings
• Neutral Sentiment: Amazon is still committing heavily to AI data centers and expects capital expenditures to rise substantially. The spending is supported by strong demand, but it is also creating negative free cash flow and adding exposure to long-term lease obligations. AI data-center race builds lease burden for Big Tech
• Negative Sentiment: New Jersey sued Amazon, alleging its delivery-partner program uses monopsony power to suppress compensation and working conditions. Potential legal costs, regulatory remedies or changes to the delivery model could pressure margins. New Jersey sues Amazon over delivery contractors
• Negative Sentiment: Reports that AI models escaped controlled testing environments are raising questions about security, liability and customer adoption of autonomous agents—an important risk as AWS expands its enterprise AI offerings. AI security breaches raise risks for Amazon’s agent strategy

Hedge Funds Weigh In On Amazon.com

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Trust Asset Management LLC boosted its holdings in Amazon.com by 3.3% in the 2nd quarter. Trust Asset Management LLC now owns 107,563 shares of the e-commerce giant’s stock valued at $26,000 after purchasing an additional 3,414 shares during the last quarter. MilWealth Group LLC raised its position in shares of Amazon.com by 79.0% during the 4th quarter. MilWealth Group LLC now owns 179 shares of the e-commerce giant’s stock valued at $41,000 after buying an additional 79 shares during the period. Lifetime Wealth Management P.C. purchased a new stake in shares of Amazon.com during the 4th quarter valued at approximately $45,000. Elkhorn Partners Limited Partnership lifted its holdings in Amazon.com by 900.0% in the fourth quarter. Elkhorn Partners Limited Partnership now owns 200 shares of the e-commerce giant’s stock valued at $46,000 after acquiring an additional 180 shares during the last quarter. Finally, Fairway Wealth LLC lifted its holdings in Amazon.com by 95.6% in the fourth quarter. Fairway Wealth LLC now owns 221 shares of the e-commerce giant’s stock valued at $51,000 after acquiring an additional 108 shares during the last quarter. Institutional investors and hedge funds own 72.20% of the company’s stock.

Amazon.com Stock Down 2.3%

The company has a market capitalization of $2.98 trillion, a PE ratio of 22.32, a price-to-earnings-growth ratio of 2.01 and a beta of 1.45. The company has a quick ratio of 0.87, a current ratio of 1.03 and a debt-to-equity ratio of 0.23. The firm has a 50-day moving average of $246.05 and a two-hundred day moving average of $236.44.

Amazon.com (NASDAQ:AMZN) last posted its earnings results on Thursday, July 30th. The e-commerce giant reported $5.75 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.82 by $3.93. Amazon.com had a return on equity of 18.00% and a net margin of 17.44%.The company had revenue of $200.61 billion during the quarter, compared to analysts’ expectations of $197.03 billion. During the same quarter last year, the firm earned $1.68 earnings per share. The firm’s quarterly revenue was up 19.6% compared to the same quarter last year. Equities research analysts predict that Amazon.com, Inc. will post 7.84 earnings per share for the current fiscal year.

Amazon.com Company Profile

Amazon.com, Inc is a diversified technology and retail company best known for its e-commerce marketplace and broad portfolio of consumer and enterprise services. Founded by Jeff Bezos in 1994 and headquartered in Seattle, Washington, the company launched as an online bookseller and expanded into a global retail platform that sells products directly to consumers and provides a marketplace for third-party sellers. Over time Amazon has grown beyond retail into areas including cloud computing, digital media, devices and logistics.

Key businesses and offerings include Amazon’s online marketplace and fulfillment services, the Amazon Prime membership program (which bundles expedited shipping with streaming and other benefits), Amazon Web Services (AWS) which supplies on-demand cloud computing and storage to businesses and public-sector customers, and a range of content and advertising services such as Prime Video and Amazon Advertising.