Amazon stock dips 2% on Q3 miss, analysts see buying opportunity

Amazon's stock fell 2% on Friday after its third-quarter report disappointed investors, though most analysts view the decline as a buying opportunity due to long-term growth potential in Amazon Web Services (AWS) and artificial intelligence. The company reported earnings per share of $1.89, below the $1.96 expected by analysts surveyed by LSEG. Revenue reached $201.94 billion, missing the consensus estimate of $202.31 billion, while AWS revenue of approximately $45.98 billion was largely in line with expectations. Amazon also reported negative free cash flow of $42.4 billion over the past 12 months, reflecting heavy capital expenditures of $75.9 billion in the third quarter for AI infrastructure and data centers. Several firms adjusted price targets while maintaining positive ratings, including Morgan Stanley lowering its target to $335 from $350. Analysts cite AWS growth acceleration, a $578 billion backlog, and potential for margins in the mid-to-upper 30% range as reasons for optimism, though risks remain if AI investments outpace monetization.