EXPLAINED: WHY AMAZON CRASHED TODAY?!?

so Amazon stock tumbles after reporting earnings and although the earnings per share were actually beat the revenue did come in a little bit lower than what was expected causing the overall stock to actually sell off nearly 7% after market hours but it's not even the earning report it's the guidance the outlook for Q3 of 2024 that sent stocks flying um or I'm not I'm sorry not flying falling lower even for longer and I want to explain exactly what we mean by this so let me go ahead and quickly share my screen I've said this before again one part that is important is beating Market's expectation the forecast the earnings per share and the revenue so Revenue was uh missed earning per share was beat with that being said its guidance was off for Q3 of 2024 and this is the part that's kind of challenging for newer investors or newer traders to understand so I want to make sure that I dedicate a little bit of time to this what happens is that yes we are focused on Q2 that is what Amazon is currently reporting earnings on but investors as many of you guys should know they're always thinking about the future and they always have very high expectation in this example they expected Amazon uh to be at 158.4 3 billion for the upand cominging quarter and Amazon guided that it was going to be right around 154 to 158.523 is actually not that bad I mean feel free to do your own due diligence when you look at Amazon stock it looks like again it sold off 6% after market hours it's trading at lows of 17040 uh during the aftermarket trading session if you look at this on the day chart it doesn't reflect it yet on the chart because the market um all of this movement happened after the market closed but this would put Amazon right around down here very very close to the moving average that is super exciting finally deals are presenting themselves I mean that's the way that I look at it right deals are presenting themselves you don't have to buy now because it doesn't look like the market has established its support yet but this is really exciting because now there's actually money to be made we can buy into the dip if it Finds Its support and then begin to make money as the market recovers finally rather than buying at all-time highs and hoping that the market goes higher for longer with that being said well what exactly was reported this is what I want you to kind of do a little bit more due diligence on what was actually said that maybe scared away some investors so the report wrapped up a big uh Tech uh big Tech result that flashed warning that investors have limited patience for massive AI spending we saw this with Google we saw this with Microsoft a lot of these companies are massively investing into AI but they're not seeing the return right away they're not doing horrible they're just not seeing the return right away and this is kind of rubbing investors or Wall Street the wrong way which again shouldn't really surprise you we've said this before where any expect or forecast is normally overhyped or overly priced in and this is why when you see Nvidia and all of those AI companies excessively Gap up it's never a bad idea to understand maybe when to be lighter on your position to anticipate that pullback because what goes up very quickly normally corrects itself very quickly so the way that I see this is that it's kind of just bringing back the market down to reality that's truly the way that I see this there's a lot of hype that has been priced in that the market was going higher for longer for you know the past few months and no one was asking any questions but again if you're part of my lpp team if you watch our live trading sessions we were always just scratching our heads of like oh my goodness like this is great I mean direction is bullish but for how long can we tolerate this before the market begins to pull on back nothing about what Amazon actually reported was necessarily bad if you guys can see the overall expectation of the earnings per share Amazon reported $126 for the earnings per share versus the estimate of $1 4 cents but yet investors Focus instead on the weakness of the report so again Amazon generated 148 Bill billion dollar nearly in Revenue with which was a touch below 148.8kg 6.3 billion in Revenue compared to 26 billion which was what was expected and 22.1 billion which was what it did last year so year-over-year from 22.1 billion to 26.3 it is growing but again it is simply not growing in that AI space as quickly as Wall Street expected and that's not Amazon's fault that's wall Street's fault and that's what I want you to understand about all of this is that sometimes a lot of hype just gets factored in in advance and we just kind of have to roll with it right uh this is why when markets go higher for longer they become very overbought I always try to remind beginners of like hey have a plan B if markets do begin to pull back just make sure you're not so heavily invested that you can't tolerate those pullbacks there's nothing wrong with partaking with that bull run just knowing that if things look like they're too good to be true for a short period of time don't be afraid to take profits and know that pullbacks are inevitable it's not about an if the market will correct itself it's simply a wi uh so with that being said again that wraps up the overall big Tech when it comes down to earnings if you guys have any further questions about this I would love to answer it for you and that's going to be down in the description uh or in the comment section down below again if you want to be able to watch me trade live as soon as tomorrow when the Market opens that's going to be that second link in the description down below you can sign up today and watch me trade live as soon as tomorrow by the time the Market opens appreciate your time hope that your thumbs up please consider subscribing and like always like to make sure that we end the year on a green note take care team