Amazon Faces Stock Decline Despite Strong Q4 Results

Amazon's stock has taken a hit, dropping over 4% after Q4 2024 results, despite EPS of $1.86 and revenue of $187.8 billion, due to weaker Q1 2025 guidance. Investors remain cautious amid rising capital expenditures.

Date: 28-02-2025

AI Rating: 5

Earnings Per Share (EPS): Amazon reported an EPS of $1.86 for Q4 2024, which indicates solid profitability. However, the market reacted negatively, leading to a drop in stock price despite the seemingly strong earnings.

Revenue Growth: The company announced a revenue of $187.8 billion for the quarter, showcasing strong sales performance. Nevertheless, the forecast for upcoming quarter revenue between $151 billion and $155.5 billion fell short of analysts' expectations of $158.33 billion.

Concerns Over Future Performance: The guidance for Q1 2025 was primarily responsible for the stock's downturn. With the forecasted revenues not meeting expectations, concerns are brewing among investors about Amazon’s growth trajectory. This was exacerbated by rising capital expenditures related to AWS expansions and improvements in fulfillment, which adds to investor anxiety regarding future cash flow.

Comparatively, Amazon's stock is performing weaker than its competitor MercadoLibre, which has gained significantly over the past year. This performance disparity is likely contributing to investor sentiment impacting AMZN's stock movement.

Overall, while Amazon's strong quarterly performance can be seen positively, the weak guidance and increased spending do raise valid concerns among investors, translating into a volatile outlook.

Stocks: AMZN MELI