Amazon's Q3 2026 Reckoning🌟🌟🌟The stock market does not trade on pure data. It trades on human emotion, fear and …
Amazon's Q3 2026 Reckoning
🌟🌟🌟The stock market does not trade on pure data. It trades on human emotion, fear and ultimate conviction. Look no further than $Amazon(AMZN.US)following its Q3 2026 earnings report.
Amazon did something unprecedented. It achieved its highest operating margin in history at 13.9%, generating USD 28.1 billion in operating income. Yet Wall Street threw a temper tantrum, punishing the stock with a sharp 6% to 7% post earnings plunge.
What happened?
The market's reaction boils down to a huge tug of war between growth and AI cash burn.
Amazon Web Services (AWS) is accelerating at a fast pace, exploding 39.3% YoY to USD 46 billion quarterly revenue. To power this AI beast, Amazon's Capex is locked in at USD 220 billion for 2026. This caused its 12 month free cash flow to crater to a negative USD 42.4 billion.
My Take
If you look past the immediate cash burn, Amazon is executing an excellent long term strategy. AWS and digital advertising are increasingly making up a larger part of Amazon's overall revenue mix.
Even after the drop Wall Street analysts like Morgan Stanley & Bank of America have maintained a Buy rating with price targets of USD 315 to USD 335.
Amazon is not a stock for the faint of heart or those seeking quick gains.
As Benjamin Graham famously said:
"In the short run, the market is a voting machine but in the long run, it is a weighing machine".
Dear Fellow Investors, Do you think Amazon is worthwhile investment? Please share your thoughts.🥰
@Captain Leo
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