Amazon shares collapse, Big Tech peers stay afloat
Oct 28 (Reuters) – Shares of Amazon.com Inc (AMZN.O) fell about 8% on Friday after forecasting holiday quarter sales below Wall Street estimates, while its Big Tech peers faltered. are recovering from a brutal sale this week.
The online retailer, whose market capitalization briefly dipped below $1 trillion, was last down 8.4% at $101.66, after hitting its lowest level since April 2020.
Apple Inc (AAPL.O), however, shone amid a host of dim lights in the Big Tech space as the iPhone maker reported revenue and profit that beat analysts’ estimates.
Microsoft, Alphabet and Meta gained between 1.2% and 3.1% after their shares took a beating this week on gloomy business outlook.
Big Tech stocks are on course to lose more than $400 billion this week.
Many see the megacaps as indicators of where U.S. businesses are in a year when inflation soared, prompting the U.S. Federal Reserve to pass a series of huge rate hikes that bruised markets.
Analysts are concerned that macro factors, including a strong dollar, will continue to hit Amazon in the near term, but over a longer period the retailer should be able to rebound.
“Despite accelerating revenue, Amazon was market-cut after missing expectations. Efficiency has yet to return to e-commerce,” said Ben Barringer, equity research analyst at Quilter Cheviot. .
While the cloud services segment has seen strong and sustained growth for tech 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 included 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 needed, but Intel needs to focus on cutting spending in the right places and keeping research and development investments high, said Glenn O’Donnell, research director at Forrester.
Reporting by Akash Sriram, Medha Singh, Sruthi Sankar and Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta
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