Stock Market Today, Oct. 30: Amazon Misses Revenue and Earnings Expectations

Amazon.com (NASDAQ:AMZN), a global e-commerce and cloud platform, closed at $240.35, down 1.41%. The stock fell after premarket results missed revenue and earnings expectations, and analysts trimmed price targets during the session. Investors are watching AWS growth, AI spending, and holiday-quarter sales.
Trading volume reached 103.1M shares, coming in about 153% above its three-month average of 38.3M shares. Amazon.com IPO'd in 1997 and has grown 245,363% since going public.

How the markets moved today

The S&P 500 (SNPINDEX: ^GSPC) fell 2.07% to 7,561, while the Nasdaq Composite (NASDAQINDEX: ^IXIC) dropped 2.86% to 25,437. In e-commerce and cloud computing, sector rival Walmart closed at $123.51, up 1.86%, and Costco Wholesale finished at $1,012.28, up 1.63%, highlighting a split in retail sentiment as Amazon.com absorbed post-earnings pressure.

What this means for investors

Despite the decline in the stock price, Amazon's earnings report indicated steady growth, with net sales rising 12% year over year. This included Amazon Web Services (AWS), which returned 39% annual net sales growth, well ahead of the 20% yearly increase in the year-ago quarter.

Where Amazon fell short was with expectations. Both the $201.9 billion in Q3 revenue and the $1.89 in earnings per share, which amounted to an earnings dip, were below the consensus analyst expectations.

Additionally, Amazon stood firm on its $220 billion capital expenditures (capex) goal for 2026. Such spending has become concerning, leading to sell-offs across the sector amid rising interest rates.

Moreover, a company once known for generating tens of billions of dollars in annual free cash flow had a free cash flow outflow of $42.4 billion over the trailing 12 months.

Nonetheless, despite the negative sentiment surrounding Amazon, investors do not seem as panicked as the initial reactions suggested. Even with the capex, Amazon has about $114 billion in liquidity, suggesting it can afford the investment.

Furthermore, the consumer discretionary stock clawed back most of its losses after it opened 5% below yesterday's closing price. Given Amazon's strength in the AI industry, investors have fewer reasons to be concerned about its state.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart. The Motley Fool has a disclosure policy.