Amazon’s stock plummeted over 8% on Friday after the company revealed that online sales growth had decelerated in the second quarter, and customers were opting for more affordable options, as per Reuters report.
These remarks from the online retail giant align with the prevailing trend of value-focused consumer behavior, just ahead of Walmart’s upcoming quarterly results.
Amazon CEO Andy Jassy mentioned during a post-earnings call that consumers were negotiating prices wherever possible.
Moreover, Amazon’s shares were trading at approximately $169. Should the downward trend persist, the company’s market value could decrease by about $157 billion.
In addition, Michael Morton, an analyst at MoffettNathanson, commented, “The consumer spending trends affecting other retailers seem to have finally impacted Amazon’s profit and loss.”
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Amazon’s online store sales rose 5% to $55.4 billion in the second quarter, following a 7% increase in the first quarter.
However, the company’s cloud computing sales and quarterly earnings surpassed analysts’ expectations.
Furthermore, days after Microsoft’s Azure cloud service missed market estimates and sparked concerns about Big Tech’s significant AI expenditures, Amazon Web Services (AWS) reported a better-than-expected 19% revenue increase to $26.3 billion.
According to LSEG data, the forward price-to-earnings ratios for Alphabet and Microsoft over the next 12 months were 20.46 and 30.88, respectively, compared to Amazon’s 33.92.
