Bears Blast Plummeting Amazon Stock After Revenue Miss

Analysts dished out no fewer than 16 price-target cuts in response

Assistant Editor
Jul 30, 2021 at 10:32 AM
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The shares of Amazon.com, Inc. (NASDAQ:AMZN) are down 6.7% at $3,357.99 this morning, following the company's second-quarter earnings call. Despite posting better-than-expected profits of $15.12 per share, Amazon's revenue of $113.08 billion missed the mark -- the first time the company has reported a revenue miss since 2018. Plus, the e-commerce giant provided a disappointing third-quarter revenue outlook, as it expects to have a hard time matching the boom it saw during Covid-19 lockdowns as customers return to brick-and-mortar stores.

Analysts were quick to chime in, with no fewer than 16 bear notes dished out in response to the event. J.P. Morgan Securities and Susquehanna each cut their price target by $500, to $4,100 and $5,000, respectively. The brokerage bunch is planted firmly in the bullish camp, though, with all 32 covering AMZN calling it a "buy" or "strong buy." 

Drilling down today's options activity, 156,000 calls and 111,000 puts have exchanged hands, which is twice the intraday average. The weekly 7/30 3,400- and 3,350-strike calls are the two most popular, with new positions being opened at both. Buyers of these options expect more upside for AMZN by the end of the day, when these contracts are set to expire.

Today's negative price action marks a larger post-earnings move than the options market had priced in. We noted yesterday a pullback in line with predictions would be saved by the $3,455 area, but Amazon stock is now dropping to levels not seen since early June. The FAANG concern is also on track for its second worst single-day percentage fall in the last three years, and is coming dangerously close to breaching its year-to-date breakeven level.

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