Stock Market Today, Oct. 29: Amazon Falls on Q3 Earnings Report and Capex Concerns

On October 29, Amazon.com (AMZN) experienced a decline in its stock price following its third quarter earnings report. The company's shares fell to $243.79, a 4.25% decrease from the previous close. Investors were particularly focused on Amazon's performance in the AWS cloud computing division, as well as its capital expenditures (capex), profit margins, and guidance for the fourth quarter.

Trading volume for Amazon.com shares surged to 70.8 million, significantly higher than its three-month average of 39.2 million shares. The overall market was also impacted, with the S&P 500 (^GSPC) closing at 7,720, down 0.31%, and the Nasdaq Composite (^IXIC) at 26,185, down 1.38%.

While Walmart (WMT) and eBay (EBAY) showed slight gains, Amazon's performance was under scrutiny. The e-commerce giant reported revenue of $201.9 billion, a 12% year-over-year increase, and a diluted earnings per share (EPS) of $1.89. However, Wall Street analysts had anticipated $202.2 billion in sales and earnings of $1.97 per share.

Amazon's capex commitments, projected at $220 billion for 2026, raised concerns among investors. The company's diluted EPS fell short of expectations, as did its revenue, which was below the average analyst estimate of $244.51 billion. Nevertheless, Amazon's AWS division demonstrated strong growth, with sales accelerating by 39% year-over-year to $46 billion in Q3. This growth was fueled by new artificial intelligence partnerships with companies such as Meta and Salesforce.

Looking ahead, Amazon's management anticipates AWS revenue growth rates to exceed 40% in both 2027 and 2028. Despite the mixed signals from its earnings report, Amazon's substantial capex investments remain a key focus for investors, with the potential for solid returns in the long term.