Amazon a Buy?

AI-generated source summary

Amazon's Q3 2026 earnings report showed sales of $201.9 billion, slightly missing the expected $202.3 billion, and EPS of $1.89, missing the expected $1.97. However, AWS demonstrated its fastest growth in nearly five years, contributing significantly to the company's overall performance. Despite a reported miss on both sales and EPS, the company's operating margin reached a record high of 13.9%, meaning Amazon kept approximately $14 for every $100 in sales. AWS alone generated $17.8 billion in operating profit, representing about 63% of Amazon's total operating profit of $28.1 billion. The CEO expects AWS to grow over 40% in both 2027 and 2028. Concerns exist regarding Amazon's projected spending of around $220 billion this year, with further significant increases expected in 2027. Free cash flow over the last 12 months was negative $42 billion. However, customers are utilizing new capacity almost as fast as it's installed, indicating strong demand for AWS services. Fundamental analysis from TradeForm IQ scores Amazon a 60, with growth at 74 and valuation at 37, suggesting mixed signals. Analyst consensus, however, remains a 'Strong Buy' with 59 out of 61 analysts rating it a buy, and an average target price of approximately $332.41, which is about 36.4% above the current price. The weekly stochastic indicator is around 14, indicating oversold conditions, but has not yet turned upward, suggesting no immediate bullish leaps.

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