Oct 28 (Reuters) – Amazon.com Inc. (AMZN.O) Shares fell about 8% on Friday after forecasting holiday quarter sales below Wall Street estimates, while Big Tech peers rebounded from a sell-off this week.
The online retailer, whose market cap briefly dipped below $1 trillion, was down 8.4% at $101.66, after hitting its lowest level since April 2020.
Microsoft, Alphabet and Meta all gained between 1.2% and 3.1% after their shares took a hit this week following gloomy outlooks for the companies.
Big Tech stock is on track to lose more than $400 billion this week.
Many see mega-cap companies as benchmarks for how corporate America is faring during a year when inflation has skyrocketed, prompting the US Federal Reserve to enact a series of hikes of giant fees that have bruised markets.
Analysts fear macroeconomic factors, including a strong dollar, will continue to weigh on Amazon in the near term; however, over a longer period of time, the retailer should be able to recover.
“Despite accelerating revenue, the market has downsized Amazon after missing expectations. Efficiency has yet to return to the e-commerce business,” said Ben Barringer, equity research analyst at Quilter. Cheviot.
While the cloud services segment has seen sustained high growth for technology companies, indications for Amazon, Microsoft and Intel Corp. (INTC.O) this week point to lower investments as costs rise.
Intel shares jumped 7% after the chipmaker said it cost reduction plan includes layoffs and is expected to cut costs by $3 billion next year.
However, analysts are cautious about how the company plans to cut costs.
Cost reductions are necessary, but Intel needs to focus on cutting costs in the right places and keeping research and development investments high, said Glenn O’Donnell, director of research at Forrester.
Reporting from Akash Sriram, Medha Singh, Sruthi Sankar and Chavi Mehta in Bangalore; Edited by Shounak Dasgupta
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