Insights

Amazon (NASDAQ:AMZN) share price drops 7% despite growth

Amazon falls on its latest quarter results…
The post Amazon (NASDAQ:AMZN) share price drops 7% despite growth appeared first on The Motley Fool Australia. –

The Amazon.com, Inc. (NASDAQ: AMZN) share price has fallen in after hours trade following its second-quarter results.

Shares in the e-commerce giant plunged in extended trade, despite reporting sales growth across all segments.  

At the time of writing, shares in Amazon are sitting at US$3,338.92, down 7.2% after hours.

Unpacking this delivery

Sometimes having high expectations can lead to disappointment. This appears to be the case for analysts and Amazon’s quarterly results. Analysts had pencilled in estimates of US$115.20 billion in revenue and US$12.30 in earnings per share (EPS).

While Amazon’s revenue grew by 27% year-over-year (YoY) to US$113.08 billion, it came in under estimates. For comparison, the online mega-company dealt a 41% YoY growth rate in 2020. However, Chief Financial Officer Brian Olsavsky said:

We’re starting to lap that [COVID-19 boosted quarter] and that’s why you see some of the growth rate coming down

Similar to Facebook’s results yesterday, Amazon expects a slowing of growth to continue in the next few quarters due to these difficult periods of comparison. This was likely a heavy dampener on the Amazon share price.

While growth might be momentarily ‘slowing’, the increase in dollar figures is quite impressive considering the company’s large size. For instance, operating income for the quarter increased 32.8% to US$7.7 billion.

Furthermore, subscription and Amazon Web Services sales experienced a 32% and 37% uptick.

The result marks the last of Jeff Bezos being CEO, with the reins now handed over to Andy Jassy. As of 5 July, Bezos has shifted to being executive chairman.

Amazon share price snapshot

The Amazon share price has been more subdued during the past 12 months than it has been at other times in history. The past year has witnessed an 18% appreciation, which fails to outperform the 22.6% return from the S&P/ASX 200 Index (ASX: XJO).

However, on a 5-year timeframe, the Amazon share price has pulled a 370% return for long-term shareholders.

The post Amazon (NASDAQ:AMZN) share price drops 7% despite growth appeared first on The Motley Fool Australia.

Should you invest $1,000 in Amazon right now?

Before you consider Amazon, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Amazon wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

The least productive argument in investing…

Amazon reportedly considering deal with top movie theater chain in India

Stock split watch: Is Amazon next?

Here’s why the Bubs (ASX:BUB) share price is down 4% on Monday
The 2 best shares to hang your hat on: fund managers

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!