Amazon Shares Decline While Big Tech Rivals Continue To Thrive
The online retailer, whose market cap briefly went below $1 trillion, was down 8.4% at $101.66 as of Sunday night after reaching its lowest level since April 2020.
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After predicting holiday-quarter sales below Wall Street expectations, Amazon.com Inc. shares dropped almost 8% on Friday, while its Big Tech competitors recovered from a brutal selloff this week.
The online retailer, whose market cap briefly went below $1 trillion, was down 8.4% at $101.66 as of Sunday night after reaching its lowest level since April 2020.
However, Apple Inc. stood out among a sea of fading lights in the Big Tech sector as the iPhone manufacturer posted revenue and profit that exceeded analysts' expectations.
Microsoft, Alphabet, and Meta all saw gains between 1.2% and 3.1% this week after their shares took a beating due to the companies' gloomy outlooks.
More than $400 billion in losses are anticipated for the Big Tech stocks this week.
In a year in which inflation has surged and forced the U.S. Federal Reserve to implement a series of jumbo-sized rate hikes that have hurt markets, many people look to the megacap businesses as leading indicators of how corporate America is faring.
Analysts worry that macroeconomic issues, such as a high currency, will continue to hurt Amazon in the immediate future, but over a longer time frame, the company should be able to recover.
"Despite growing revenues, Amazon's stock price has been reduced by the market after falling short of forecasts. The e-commerce industry still lacks efficiency, according to Ben Barringer, an equity research analyst at Quilter Cheviot.
While the cloud services market has seen significant and consistent growth for tech giants, signs this week point to decreased spending as prices rise for Amazon, Microsoft, and Intel Corp.
After the chipmaker disclosed that its cost-reduction strategy includes layoffs and is anticipated to reduce expenses by $3 billion next year, shares of Intel increased by around 7%.
Analysts are wary of the company's cost-cutting strategies, though.
Glenn O'Donnell, research director at Forrester, said that while cost savings are required, Intel must concentrate on reducing spending in the appropriate areas while maintaining high levels of investment in research and development.
