Amazon stock fell 8% after hours despite smashing EPS and revenue growth on a gloomy Q3 forecast.

Amazon Stock Drops Despite Strong Earnings – Buying Opportunity?

Amazon shares fell over 8% in after-hours trading on Thursday, despite beating expectations with earnings per share (EPS) of $1.66 versus the forecasted $1.33, alongside a revenue beat. The decline came as Amazon’s Q3 outlook delivered mixed signals, sparking investor caution. However, analysts at Minipip see no fundamental issues with the results, suggesting the market reaction could present a potential buying opportunity — though key technical levels need to be monitored closely.

Technical Outlook

Amazon has broken through near-term support, with the next significant level sitting around the 23.6% Fibonacci retracement at $205.00 (green line). A break below this level could open the door for a deeper decline toward $181, representing a considerable fall from the current price.

Despite the recent pullback, Amazon's P/E ratio of 35 remains relatively attractive compared to peers like Netflix and Walmart, and in line with other major tech firms.

Upside Potential

On the upside, resistance lies around $243, with a breakout potentially targeting the $258–$260 range. Notably, analyst sentiment remains positive, TipRanks shows 42 buy ratings with an average 12-month price target of $260.

Momentum Indicators

The RSI on the daily chart has also dropped sharply. A move below the 30 level could signal that the stock is oversold, offering a more favourable entry point for long-term investors.