Amazon Shares Fall, Big Tech Peers Stay Afloat

Oct 28 (Reuters) – Amazon.com Inc’s ( AMZN.O ) shares fell about 8% on Friday after forecasting holiday quarter sales below Wall Street estimates, while its Big Tech peers recovered from a bruising sell-off this the week.

The online retailer, whose market capitalization briefly dipped below $1[ads1] trillion, was last down 8.4% at $101.66, after hitting its lowest since April 2020.

However, Apple Inc ( AAPL.O ) shone brightly amid a flurry of dim lights in the Big Tech space, as the iPhone maker reported revenue and profit that topped analysts’ estimates.

Microsoft, Alphabet and Meta rose between 1.2% and 3.1% after their shares were hammered this week following gloomy outlooks from the companies.

Big Tech stocks are on track to lose more than $400 billion this week.

Many see the megacaps as a bellwether for how corporate America is faring in a year in which inflation has risen, pushing the U.S. Federal Reserve to enact a series of big rate hikes that have hurt markets.

Analysts fear macroeconomic factors, including a strong dollar, will continue to hit Amazon in the short term, but over the longer term the retailer should be able to bounce back.

“Despite accelerating revenue, Amazon has been cut down to size by the market 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 been one of high and sustained growth for technology companies, indications for Amazon, Microsoft and Intel Corp ( INTC.O ) this week point to lower investment as costs rise.

Intel shares rose about 7% after the chipmaker said its cost-cutting 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 expenses in the right places and keeping research and development investments high, said Glenn O’Donnell, director of research at Forrester.

Reporting by Akash Sriram, Medha Singh, Sruthi Sankar and Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta

Our standards: Thomson Reuters Trust Principles.