Shares of tech giant Amazon (NASDAQ:AMZN) fell last week to new 52-week lows after the company
released its latest earnings report. Sales of $127.1 billion for the third quarter rose 15% year over year
and slightly missed analyst expectations of $127.46 billion. The bigger miss, however, was on the
company's guidance for Q4, with Amazon projecting revenue of up to $148 billion while Wall Street was
expecting the guidance to be much higher, at over $155 billion. The underwhelming guidance comes
even after Amazon had its second Prime Day of the year in October, the first time it has done so.
The good news for investors is that after two straight quarters of being in the red, the online retailer
finally got back into the black, posting a profit of just under $2.9 billion. That was down 9% from the
same period last year.
Unfortunately, the positives weren't enough to offset the negatives for investors as Amazon's stock fell
after the release of the results. From over $120 per share earlier in the week, the stock would end up
falling to below $100 by Friday. Tech stocks have been struggling this earnings season amid a slowdown
in revenue as advertisers have been scaling back on ads and consumers are tightening their spending as
well. With the decline in share price, Amazon is now trading around the levels it was at in early 2020.
Given the challenging macroeconomic conditions in the market and a possible recession on the way,
investors shouldn't rush out to buy Amazon stock just yet as there could be more of a decline in its
valuation in the months ahead.
