Why AMZN is falling hard after strong earnings report

Amazon (AMZN) reported earnings per share (EPS) of $1.26, beating estimates of $1.04. It also reported nearly doubling profits compared to the same period last year. Yet the stock is currently gaping down more than -12% (at time of writing). Why?

Yahoo Finance says that AMZN’s forecast for this quarter disappointed investors ($154 billion-$158.5 billion compared to analyst forecasts for $158.43 billion). Bloomberg wrote that AMZN’s intention to increase spending costs on AI spooked investors. Some social media posts speculated that it was a classic ‘sell-the-news’ move – where investors build up a stock’s price before a major event before proceeding to sell after the event.

A stock’s price is the result of a massive aggregation of objectives, agendas, analysis, demands, emotions, thoughts, whims and fancies from all sorts of people and programs. There usually never is any single reason why a stock price might rise or fall. Despite our human need to explain it rationally, it is never that simplistic. This is why we developed DeepCap AI to analyze and account for a multitude of variables. It’s a massive game of probability, specific to each individual stock while being simultaneously influenced by macro trends.

AMZN has never been on DeepCap’s DeepList, and today we’re thankful to our AI engine for keeping it out.