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Amazon Isn't ‘Immune' From Macroeconomic Pressures, Investor Says. Three Takes on the Earnings Miss

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Even the mighty Amazon isn't immune to supply chain constraints and other macroeconomic risks, one investor says.

The e-commerce giant's stock fell 3% on Friday, dragging on the Nasdaq Composite index following a disappointing third-quarter earnings report.

Amazon's earnings and revenue results missed analysts' expectations and the company delivered weaker-than-anticipated guidance for its holiday season quarter.

Here's what three market analysts made of the results:

Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors, said Amazon Web Services proved to be a particularly bright spot:

"Headed into the print, the stock was only up 6% on the year. It was a laggard … because there were concerns about e-commerce slowing down, very difficult comparisons and an investment cycle. They're having higher spend. They have to spend on wages. They have to spend on people. They have to spend on the supply chain and logistics. So they're not immune. And they're going to spend and that's what they should do, but that's why the stock has lagged. On the positive side, those are great [Amazon Web Services] numbers. They really are. I was thinking 35%. They did 37 last quarter and I think the whispers were 35-ish. So 39% growth, that is terrific. They are so much bigger than Microsoft and also Alphabet in terms of the cloud business, so this is really encouraging to see. We know that Microsoft grew Azure at 48% and Alphabet at 45%, so this is right up there with them, too, and again, as I mentioned, they're much bigger. So I think it's going to be fine. I think we have to get through this quarter or maybe even next quarter. Maybe it's a 2022 story as the investment spend starts to subside."

New Street Advisors Group founder and CEO Delano Saporu, expected the e-commerce business to make a near-term comeback:

"The big thing I was looking for is the offsetting of AWS growth versus some of the challenges they might be facing in the e-commerce business. I do think the e-commerce story does come back over the holidays and is passed into 2022, so I think that's something to focus on. So investors may seen an opportunity here. But … AWS is a strong suit here. It's obviously not offsetting what's happening [with the stock] after the print, but that was kind of the big opportunity that I was looking for. Last quarter, they guided lower on revenue. They kind of said on the low end, they might look at $106 billion. So this miss versus the Street is obviously disappointing for investors. But we were kind of expecting something slower on the side of just overall top-end revenue. But I think in general, I'm going to be looking at AWS numbers as well as how e-commerce can rebound looking over the holidays."

Tom Forte, senior research analyst at D.A. Davidson, said Shopify's results, in which it fell short of estimates, could help shed light on Amazon's miss:

"If you look at the quarter, it shows a quarter where the excess performance for AWS and then OK performance in advertising from a profitability standpoint wasn't able to overcome weakness online. And I think when you look at it from Shopify's lens, Shopify also indicated [Thursday] that consumers once again in the third quarter resumed shopping in physical stores once they were vaccinated. So that's how I'm looking at the initial results from Amazon."

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