Shares of e-commerce giant Amazon (AMZN -0.16%) are down 6.8% as of 12:14 p.m. ET Thursday. The tumble follows another key internet company's fourth-quarter earnings miss, during a market-wide sell-off. Amazon's fourth-quarter earnings report is slated for release after Thursday's closing bell rings.
Blame Meta Platforms (FB) -- the company formerly known as Facebook -- mostly. The world's most prolific social network posted Q4 per-share earnings of $3.67 Wednesday evening, missing estimates of $3.84. Its revenue outlook for the quarter currently underway also came up short, with the company citing new competitive pressure and pricing challenges linked to policy changes with Apple's iOS mobile operating system.
Investors are (understandably) assuming Amazon is facing comparable headwinds.
Analysts expect Amazon to report earnings of between $3.58 and $3.88 per share, depending on the source, though those figures should be taken with a grain of salt. Amazon's profitability is being dramatically reduced by investments in its own growth. The company would normally report income on the order of $6 per share, and earned anywhere between $10 and $15 per share in the throes of the pandemic; it's difficult to meaningfully guess exactly how much money the company made as the world moves on from the COVID-19 contagion.
A more relevant measure of Amazon's fourth-quarter success will be the company's top line, which the analyst community collectively believes will be $137.6 billion, up 9.6% year over year.
Regardless, given today's volatility and the sheer uncertainty as to the actual health of the internet's top names, the smart move here is remaining on the sidelines if you're not already holding the stock, or sticking with Amazon if you're holding it for the long haul anyway. Short-term speculators stand to get burned.