Amazon stock falls: why analysts are saying its a buying opportunity

What happened

Amazon stock fell 2% on Friday after third-quarter results disappointed investors. Earnings were $1.89 per share versus $1.96 expected, and revenue was $201.94 billion versus $202.31 billion expected. Capital spending reached $75.9 billion as Amazon invested in data centres and AI capacity.

Confirmed

Global impact / market context

Amazon is spending heavily on AI infrastructure, which drags on free cash flow and near-term profit. The $42.4 billion cash outflow shows how much money is tied up in data centres before those investments generate returns, so investors are weighing today's lower profit against future growth.

Analyst inference

Analysts mostly remain bullish, viewing the sell-off as a buying opportunity because of AWS and AI growth potential, even as several cut price targets. The stock fell nearly 7% before the open, then recovered to about a 2% decline, showing buyers stepped in after the initial drop.

Analyst inference

What to watch

1. Watch Amazon Web Services revenue, which was about $45.98 billion and broadly in line with expectations, for signs that cloud growth can support the heavy AI spending. Confirmed
2. Track whether Amazon's capital spending keeps rising above the $75.9 billion quarterly level, since continued increases would keep pressuring free cash flow and near-term profit. Analyst inference
3. Watch the analyst price target changes mentioned in the article, because further cuts could signal growing doubt about how quickly the AI investments will pay off. Proposed

Evidence

• invezz.com