Amazon.com shares have fallen more than 7% over the past six months, but Chief Executive Andy Jassy says investors are missing how much the company’s retail engine has improved and how much more room it has to run.
Amazon retail gains as shares fall on earnings miss
Consumer Spending
The message matters because Amazon’s stock has increasingly been treated as a cloud and AI story, even as its retail business still drives hundreds of billions of dollars in sales and remains the largest lever on consumer spending exposure in U.S. equity markets. Jassy’s pitch is that the market is underweight a business that is still taking share, still expanding faster than peers and still has a long runway as shopping shifts online.
Sentiment Indicators
On the company’s third-quarter call, Jassy said some investors are “sleeping a bit” on the progress in retail, pointing to more than 30 billion items sold last year and unit growth of nearly 15% year over year so far this year. He also said the retail business added more than $90 billion in gross sales over the past 12 months, roughly double the quarterly gross sales added by its next large U.S. competitor.
That growth argument is colliding with a weaker near-term earnings picture. Amazon posted third-quarter revenue of $201.94 billion, just below Wall Street’s $202.22 billion estimate, while earnings of $1.89 a share also missed expectations. The company guided fourth-quarter revenue to $240 billion to $247 billion, a range that straddles but does not comfortably beat the consensus estimate of $244.58 billion.
For investors, the split is straightforward: Amazon is still growing fast, but the market wants clearer evidence that that growth will translate into better margins and more consistent earnings beats. The company said operating income should land between $28.5 billion and $33.5 billion in the current quarter, above $25 billion a year earlier, yet its shares have still struggled as the stock pulled back from recent highs.
Technical indicators also suggest the selloff has cooled momentum. Amazon’s shares recently traded below their 50-day moving average after a sharp run-up earlier in the year, and relative strength index readings have swung from overbought territory into the middle of the range, underscoring the stock’s volatile setup.
The broader story is that Amazon is trying to reframe retail from a margin drain into a durable growth driver, with Jassy saying nearly 80% of retail still happens in physical stores and that the balance could eventually flip to e-commerce. Whether investors buy that argument will likely depend on the next round of holiday sales data, consumer spending trends and whether Amazon can keep AWS growth strong enough to offset the heavy costs of competing in retail.
| Entity | Gains | Losses |
|---|---|---|
| Amazon retail | ▲Share gains, scale leverage | ▼Margin skepticism |
| Amazon shareholders | ▲Long-term e-commerce upside | ▼Near-term stock volatility |
| Traditional retailers | ▲Benchmarking pressure | ▼Market share erosion |
| Short-term traders | ▲Volatility opportunity | ▼Confidence in quick rebound |
