Amazon.com Inc’s stock fell about 8% on Friday after the company forecasted holiday-quarter sales that fell short of Wall Street expectations, while its Big Tech peers recovered from a bruising selloff this week.
The online retailer’s market cap briefly fell below $1 trillion, and it was last down 8.4% at $101.66, its lowest since April 2020.
Apple Inc, on the other hand, shone brightly amid a sea of dimming lights in the Big Tech sector, reporting revenue and profit that exceeded analysts’ expectations.
Microsoft, Alphabet, and Meta gained between 1.2% and 3.1% after their shares were battered this week due to the companies’ gloomy outlook.
This week, the Big Tech stocks are expected to lose more than $400 billion.
Many see megacap companies as barometers of how corporate America is faring in a year in which inflation has skyrocketed, forcing the US Federal Reserve to enact a series of jumbo-sized rate hikes that have battered markets.
Analysts believe macroeconomic factors, such as a strong dollar, will continue to hurt Amazon in the short term, but that the retailer will be able to recover over time.
“Despite accelerating revenues, Amazon has been cut down to size by the market after missing expectations. Efficiency has yet to return to the e-commerce business,” Ben Barringer, equity research analyst at Quilter Cheviot, said.
While the cloud services segment has seen high and sustained growth for tech companies, indications this week from Amazon, Microsoft, and Intel Corp (INTC.O) point to lower investments as costs rise.
Intel’s stock rose about 7% after the chipmaker announced a cost-cutting plan that includes layoffs and is expected to save $3 billion next year.
Analysts are concerned about how the company intends to cut costs.
Cost cuts are necessary, but Intel must focus on cutting spending in the right places while maintaining high R&D investments, according to Glenn O’Donnell, research director at Forrester.
(Adapted from GulfNews.com)
Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability
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