Shares of Amazon.com (AMZN) fell 1.4% in the last trading session, recovering from a more than 6% drop in after-hours trading on October 29 following its third-quarter earnings release. The tech giant's rising free cash outflow overshadowed the AWS unit's fastest sales growth of 39.3% in nearly five years, contributing to the stock's volatility. Amazon missed Wall Street's expectations on both revenue and earnings, deepening investor skepticism. However, strong sales growth in its cloud segment and a stable full-year capital expenditure outlook helped the stock recover some losses by Friday's close.
Amazon's third-quarter earnings of $1.89 per share missed the consensus estimate by 6%, while sales also fell short of expectations. Year-over-year, earnings dropped 3.1%, though sales grew 12%. The company's advertising and grocery businesses delivered solid growth, with the latter growing about three times faster than the rest of the store. AWS's annualized revenue run rate reached $184 billion, and its custom silicon segment posted triple-digit percentage revenue growth. Amazon expects fourth-quarter net sales to range from $240 billion to $247 billion, with profitability impacted by Project Kuiper (Leo).
For investors wary of Amazon's growing free cash outflow, exchange-traded funds (ETFs) with significant holdings in AMZN offer a diversified alternative. The VanEck Consumer Discretionary TruSector ETF (TRUD) has a 24.53% weight in AMZN, while the ProShares Online Retail ETF (ONLN) holds a 22.64% weight. The Roundhill Magnificent Seven ETF (MAGS) and Kurv Technology Titans Select ETF (KQQQ) also feature AMZN among their top holdings, with weights of 14.45% and 10.81%, respectively.