Amazon (AMZN, Financial) saw its stock plummet over 4%, resulting in a market value loss of $101.2 billion. This marks the largest single-day drop since December 2024. The decline occurred as the major U.S. stock indices also fell, with the Nasdaq down 1.36%, the Dow Jones dropping 444.23 points (0.99%), and the S&P 500 decreasing by 0.95%.
Amazon's fourth-quarter earnings report revealed revenue of $187.79 billion, slightly surpassing the expected $187.3 billion and marking a 10% increase from the previous year. Net income nearly doubled to $20 billion, with earnings per share at $1.86, exceeding the anticipated $1.49 per share. Despite these positive figures, Amazon's guidance for the first quarter of 2025 predicted revenue between $151 billion and $155.5 billion, falling short of analysts' estimates of $158.64 billion.
The company also reported a significant increase in capital expenditures, totaling $27.8 billion for the quarter, primarily for AI infrastructure, surpassing the expected $22.3 billion. The annual capital expenditure is projected to reach $105 billion in 2025. Additionally, Amazon Web Services (AWS) reported fourth-quarter revenue of $28.79 billion, slightly below the expected $28.82 billion, with growth lagging behind competitors like Microsoft Azure and Alphabet's cloud services.
Amazon faces increasing competition in e-commerce from companies like Temu and SHEIN. Coupled with lower-than-expected first-quarter revenue and profit forecasts for 2025, Amazon's stock fell by 5% in after-hours trading. Following the earnings report, Citigroup adjusted Amazon's target price from $275 to $273, maintaining a "buy" rating.
