Amazon Stock Price Dives 5% After the Close, on Lower Q1 Revenue Revision
The Amazon stock price has plunged in after-hours trading, as Q1 revenue and spending on AI were revised lower, despite higher revenue in Q4 of 2024.
By the end of the trading session, North American stock markets delivered mixed results. The S&P 500 edged up 0.3%, while the Nasdaq Composite led gains with a 0.5% increase, but that doesn’t take into account the major decline in Amazon shares, erasing about $130 billion worth of stock market value. On the other hand, the Dow Jones Industrial Average (DJIA) slipped 0.3%, and the Russell 2000 fell 0.5%, reflecting some weakness in small-cap stocks. Despite these fluctuations, overall risk sentiment leaned on the positive side today, with investors closely monitoring key developments in monetary policy (BOE), trade negotiations, and corporate earnings, which continue to shape market expectations.
Amazon Chart Daily – The Price Should Be Close Above the 50 SMA
Corporate earnings played a significant role in market movements after the US session close, with Amazon emerging as a major focus for investors. After the closing bell, Amazon’s shares dropped 5% in after-hours trading following a disappointing first-quarter sales forecast. The company projected revenue between $151 billion and $155.5 billion, missing the consensus estimate of $158 billion. This weaker guidance raised concerns about a potential slowdown in growth, despite the fact that Amazon’s fourth-quarter results slightly exceeded expectations, with revenue coming in at $187.8 billion compared to the anticipated $187.3 billion.
Investor reaction to the earnings report was largely negative, as the lower-than-expected guidance overshadowed the modest Q4 earnings beat. The decline in Amazon’s stock price from $238 to $226 contributed to increased volatility in tech stocks, particularly in the e-commerce sector. While broader market sentiment remained cautiously optimistic, Amazon’s shares continued to struggle, reflecting investor uncertainty about the company’s future growth prospects.
Amazon Revenue for Q4 2024 and Projections for Q1 2025
- Q1 Sales Guidance Below Expectations:
- Amazon projected revenue between $151 billion and $155.5 billion, missing the consensus estimate of $158 billion.
- Q4 Results Slightly Beat Forecasts:
- Reported revenue of $187.8 billion, slightly above the expected $187.3 billion.
- Cloud unit, Amazon Web Services (AWS), reported a 19% rise in revenue to $28.79 billion, falling short of estimates of $28.87 billion,
Looking ahead, traders tomorrow will remain focused on upcoming economic data release of the non-Farm Payrolls, which could sour the sentiment further for stock markets, sending Amazon shares even lower. However, these dips are good opportunities to embark on the long journey upward, with Donald Trump being a big fun of bullish stock markets.
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