Amazon Stock Price Declines Amid Profit-Taking and AI Demand
Amazon's stock price declined by 1.8% on Wednesday, reaching as low as $267.10 and closing at $267.28. A total of approximately 29.36 million shares were traded during mid-day trading, representing a decline of 41% from the average session volume.
The e-commerce giant's strong fundamentals continue to be reflected in its revenue growth, with AWS revenue rising by 36.7% year-over-year to $42.2 billion, its fastest growth in 18 quarters. The company also reported that its backlog reached $496 billion, with much of the capacity committed for 2027.
Positive sentiment surrounding Amazon's AI and cloud-security platform remains strong, with OpenAI's collaboration strengthening Bedrock's cybersecurity offering. Analysts continue to emphasize the company's revenue growth, strong balance sheet, and earnings potential, resulting in a median analyst price target of $320, above the recent trading range.
However, investors are increasingly focused on whether future cloud profits will justify Amazon's enormous investment in AI demand and AWS capacity commitments. A proposed bill in New York could also pose a threat to more than 5,000 jobs and potentially prompt changes to its logistics network.