Amazon Stock Price Slips Despite Robust Earnings and Growth Prospects
Amazon's stock price has been lagging behind the market in recent weeks, despite its impressive second-quarter earnings and growth prospects. The company's stock closed at $246.15 on Monday, down 1.41% from the previous day. This puts Amazon 14.3% below its high of $287.20 set in early August.
The relative performance of Amazon has been underwhelming compared to the S&P 500 and Nasdaq indices, which have seen losses of 0.77% and 0.92%, respectively. Over the past month, Amazon's stock price has declined by 6.29%, while the retail-wholesale sector and S&P 500 have lost 6.02% and gained 0.96%, respectively.
Despite this underperformance, Amazon's second-quarter earnings were a standout success, with revenue reaching $200.6 billion, up 20% from the same period last year. Operating income was $27.5 billion, up 43%, and AWS growth accelerated to 37%, its fastest since 2021.
The company's backlog stood at $496 billion, growing triple digits, with multi-gigawatt Trainium commitments from two large AI labs. Management raised 2026 cash capex guidance to approximately $220 billion, mostly for AI and AWS capacity building. The free cash flow is negative while Amazon continues to spend heavily on these initiatives.