Key Highlights

● AMZN shares fell 1.11% to $259.53 in Monday’s session, giving back part of Friday’s 3.3% rally to $262.43.

● Cantor Fitzgerald’s Deepak Mathivanan cut his price target to $310 from $320 while keeping an Overweight rating.

● Second-quarter net sales rose 20% to $200.6 billion, and AWS sales rose about 37% to $42.2 billion.

● Amazon raised its 2026 capital spending estimate to about $220 billion from about $200 billion.

What pushed Amazon.com (NASDAQ:AMZN) onto the list of the most active U.S. stocks on Monday, October 12, was mostly its sheer size combined with a broad pullback in technology shares. It was not a company-specific shock. The stock lost 1.11% to close at $259.53, giving back part of Friday’s 3.3% rally to $262.43. About 26.52 million shares traded, worth roughly $6.88 billion, which placed Amazon 11th by dollar volume. That turnover was actually below normal: relative volume was 0.74, so Amazon ranked high because each share costs a lot and its market value is about $2.8 trillion, not because traders were rushing in.

The one Amazon-specific item on Monday was an analyst move. Cantor Fitzgerald analyst Deepak Mathivanan cut his price target to $310 from $320 while keeping an Overweight rating. A trimmed target paired with a reiterated positive rating is a modest signal, but it came on a day when investors were already shedding technology exposure.

A Risk-Off Tilt in Tech

The wider market explains most of the decline. The Dow Jones Industrial Average rose 0.38% to about 51,851, the only major index to finish higher. The S&P 500 slipped 0.06% to about 7,807 and the Nasdaq Composite fell 0.44% to about 27,246. Technology (down 1.25%) and consumer discretionary (down 0.53%) were the two weakest S&P 500 sectors. Amazon is a heavyweight in consumer discretionary. Energy and consumer staples led the gainers.

Investors appeared to rotate from growth into value. Semiconductor and AI-linked names sold off on renewed valuation worries, with memory-chip stocks taking some of the heaviest losses. The cautious mood was tied to a jump in oil after Houthi attacks in the Middle East over the weekend. Traders were also positioning ahead of big-bank earnings on Tuesday, September consumer price data on Wednesday and producer prices on Thursday. The bond market was closed for Columbus Day.

For Amazon, the memory-chip selloff touches a theme investors are already watching. Amazon raised its 2026 capital spending estimate to about $220 billion from about $200 billion and management cited higher memory-chip costs. Questions about whether AI spending is getting ahead of itself have weighed on the stock before. AWS chief executive Matt Garman pushed back on bubble fears: “We feel really good about the spend we’re making now.” Bridgewater founder Ray Dalio, for his part, called the AI boom a “classic bubble.”

What Amazon Does

Amazon runs one of the world’s largest online stores and third-party marketplaces. It also operates the Prime subscription program, a fast-growing advertising business and Amazon Web Services (AWS), the cloud-computing unit that produces most of its profit. The consumer hardware arm is still active. On October 8 Amazon unveiled a new line of Alexa tablets priced from $230, refreshed Kindle e-readers and new Ring cameras and a smart lock. The tablets go on sale in the U.S. on October 14. Those launches matter less to the stock than AWS and retail margins, but they show Amazon pressing its Alexa push into the holiday season.

Latest Results and Guidance

Amazon’s second quarter, reported July 30, was strong. Net sales rose 20% to $200.6 billion, the first quarter above $200 billion. AWS sales rose about 37% to $42.2 billion. Chief executive Andy Jassy said AWS was growing at “our fastest growth in 18 quarters.” Operating income climbed to $27.5 billion from $19.2 billion, and AWS contributed $16.6 billion of it. Net income jumped to $62.6 billion, or $5.75 a share. The total included $53.4 billion of non-operating income, mostly from revaluing Amazon’s stake in Anthropic. Comparable earnings were $1.88 a share against a $1.83 consensus.

Guidance points to a slower top line in the current quarter. Amazon expects third-quarter net sales of $197 billion to $202 billion, up 9% to 12%, and operating income of $22.5 billion to $26.5 billion. Prime Day moved into the second quarter this year, and management estimated third-quarter growth would be nearly 400 basis points higher without that shift. The stock rose 19.8% around the July report.

Valuation

The trailing P/E is 20.87 on trailing earnings of $12.43 a share. That multiple looks low for Amazon because the Anthropic gains inflate reported profit. On an adjusted basis, Amazon’s trailing P/E is about 36 times, compared with about 29 times for Microsoft (NASDAQ:MSFT), 16 times for Alphabet (NASDAQ:GOOGL) and 39 times for Walmart (NASDAQ:WMT). Those figures use a different method and are not strictly comparable with the trailing figure above. Wall Street remains bullish overall. Of 58 analysts, none has a Sell rating, and the consensus rating is “Moderate Buy” with an average target of $322.86. Both are well above Monday’s close.

Bull Case versus Bear Case

Bulls point to AWS. AWS has a backlog of $496 billion, and most AI capacity is signed on terms of at least five years. Amazon’s AI and custom-chip businesses each run above $25 billion a year, and advertising grew 26% last quarter. Jassy has said AWS can become “a trillion dollar annual revenue business for us in time.”

Bears focus on cash. Trailing free cash flow is negative $7.6 billion as capital spending rises. There are reports that Amazon pressured sellers to raise prices at rival retailers, an allegation that adds antitrust risk. California made those allegations in its antitrust lawsuit, with trial set for January 2027. Amazon denies the claims. Insiders have also been selling, including August sales by Garman and senior vice president David Zapolsky under preset Rule 10b5-1 plans. The stock is still about 10% below its 52-week high of $287.20.

Amazon’s Third-Quarter Test: AWS Growth and Capital Spending

The next major test is third-quarter earnings, which is expected around October 29. That date is not yet confirmed. Investors will look for whether AWS growth beats last quarter’s 36.7% pace, which would extend five straight quarters of faster growth. They will also want an update on 2026 capital spending, and a figure above $220 billion is the level to watch. Earlier reads on cloud demand should come from Alphabet and Microsoft results around October 27. In the nearer term, this week’s inflation data and oil prices will shape appetite for megacap growth stocks. On Monday, that appetite rather than any Amazon headline did most of the work.