Oct 28 (Reuters) – Amazon.com Inc’s (AMZN.O) Stocks fell about 8% on Friday after forecasting quarterly sales that fell short of Wall Street estimates, while their peers in major tech companies recovered from a heavy sell-off this week.
The online retailer, whose market capitalization briefly fell below $1 trillion, fell 8.4% at $101.66, after hitting its lowest level since April 2020.
Apple company (AAPL.O)Still, it shone through a crowd of dim lights in the Big Tech space, as the iPhone maker reported revenue and profits that beat analyst estimates.
Microsoft, Alphabet and Meta shares rose between 1.2% and 3.1% after their shares took a hit this week in the wake of bleak expectations from the companies.
Big tech stocks are on track to lose more than $400 billion this week.
Big companies are seen by many as leaders in US corporate performance during a year of soaring inflation, prompting the US Federal Reserve to enact a series of massive interest rate increases that bruised markets.
Analysts fear that macroeconomic factors, including a strong dollar, will continue to hit Amazon in the near term, however, over a longer period of time, the retailer should be able to bounce back.
“Despite accelerated revenue, Amazon has been downsized by the market after exceeding expectations. Efficiency has not yet returned to the e-commerce business,” said Ben Baringer, equity research analyst at Quilter Cheviot.
While the cloud services sector has been one of the high and sustainable growth of technology companies, there are indications for Amazon, Microsoft and Intel Corp. (INTC.O) This week indicates lower investments as costs rise.
Intel shares rose about 7 percent after the chipmaker said its cost-cutting plan includes layoffs and is expected to cut costs by $3 billion next year.
However, analysts are wary of how the company plans to cut costs.
Cost cuts are necessary, said Glenn O’Donnell, Forrester’s director of research, but Intel needs to focus on cutting spending in the right places and keeping R&D investments high.
Additional reporting by Akash Sriram, Medha Singh, Sruthi Sankar and Shafi Mehta in Bengaluru; Edited by Shunak Dasgupta
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