The steep sell-off in Amazon (AMZN) stock is rolling right along.
Shares of the tech giant fell 7.5% on Thursday amid a sweeping sell-off for markets after the Federal Reserve meeting Wednesday, hitting 52-week lows during the session.
Disappointing quarterly earnings and outlooks from e-commerce rivals eBay (EBAY), Shopify (SHOP), Etsy (ETSY), and Wayfair (W) didn’t help sentiment around Amazon. Each company warned of slower online retail demand and the need to reinvest more aggressively to address new shopper behaviors.
Year to date, Amazon’s stock is down 30%, a worse decline than the 21% drop for the Nasdaq Composite and the 12.99% decrease in the S&P.
An argument could be made that investors are still digesting an un-Amazon-like first quarter.
Profits were hit by a $6 billion headwind from supply chain inefficiencies and general inflation, the company said. And Amazon’s sales increase of 7% in the quarter marked the company’s slowest growth rate in more than two decades. (Amazon sales saw a 44% rise in the same period last year.)
Looking forward, Amazon outlined a potential $4 billion hit to profits in the second quarter from the same factors and promised to bring spending more in line with sales trends into the back half of the year.
“Amazon is now large enough and diversified enough to be fully exposed to global macro challenges, and its EPS results and outlook, especially on the cost side, reflect that,” warned Mark Mahaney, tech analyst at Evercore ISI. “We believe these macro issues are transitory (sigh), and that Amazon can effectively execute through them, delivering rising profit margins over time, but this is now likely a late-2022/early-2023 transition vs. our prior expectation of mid-’22.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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