Amazon Stock Recovers After AWS Outage
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Mondays are never easy, but this particular Monday got off to a bumpier start than usual due to a massive Amazon Web Services (AWS) outage. The outage, which occurred in the wee small hours Monday morning, caused many websites and apps that run on AWS cloud services to be slow, choppy, or down altogether.
The outage happened just after midnight Pacific time and around 3:00 a.m. on the East Coast.
As AWS is the largest cloud computing, it had a widespread impact, impacting all of Amazon’s own ecosystem, including Prime, Alexa, and Amazon.com. It also slowed down social media sites like Reddit and Snapchat, gaming sites like Fortnite, Roblox, and PlayStation, financial apps like Coinbase, Robinhood, and Venmo, airline websites, including Delta and United, and even the New York Times and its popular Wordle game.
According to the BBC, there had been more than 6.5 million reports about the service, impacting about 1,000 companies.
Amazon (AMZN) stock dropped in the pre-trading hours, falling about 2%. But by the time the market opened Monday at 9:30 a.m. ET, the problem had been fixed.
Underlying issue “fully mitigated”
Amazon said outage was due to an “underlying DNS issue” in the East region of the U.S. But by 6:35 a.m. ET, the “issue has been fully mitigated, and most AWS Service operations are succeeding normally now.”
But the Amazon update added that “some requests may be throttled while we work toward full resolution.” It added that “requests to launch new EC2 instances (virtual servers) in the US-EAST-1 Region are still experiencing increased error rates. We continue to work toward full resolution.”
As of 10:30 a.m. ET, the latest update said multiple AWS services experienced network connectivity issues in the US-EAST-1 Region.
“We are seeing early signs of recovery for the connectivity issues and are continuing to investigate the root cause,” AWS officials said.
Markets have mostly shrugged it off, as the majority of AWS services are back up to speed. After the initial pre-market drop, Amazon stock was up about 1% on Monday morning to about $215 per share.
Amazon is set to report third quarter earnings on Thursday, October 30 after the market closes. Amazon stock is down about 2% year-to-date.
Amazon stock is trading at 33 times earnings and has a median p-rice target of $265 per share, suggesting a 23% return over the next 12 months.
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