Amazon Stock Drops as the It Market Crashes

October 28, 2022 at 10:01 AM EDT

Amazon.com Inc (NASDAQ:AMZN)

After estimating holiday-quarter sales below Wall Street projections, shares of Amazon.com Inc (NASDAQ:AMZN) fell by around 13% in premarket trade. The online retailer came close to losing its membership in the trillion-dollar business club. Due to a sell-off in the tech shares, Amazon stock declined this morning.

Stocks of companies, including Microsoft Corp., Alphabet Inc. (NASDAQ:GOOGL), and Meta Platforms Inc., fell this week as investors dumped technology companies on worries of a recession (NASDAQ:MSFT).

Amazon stock was trading at $96.77, down 12.8%, their lowest level since March 2020.

Despite the gloomy forecasts from other Big Tech companies, Apple Inc (NASDAQ:AAPL) shone through with guidance for sales growth of under 8% in the Christmas period.

In the last 12 months, when inflation has skyrocketed, prompting the U.S. Federal Reserve to implement a series of jumbo-sized rate rises that have hurt markets, many look to the mega-cap businesses as bellwethers for the health of corporate America.

Experts are concerned that macroeconomic issues, such as a strong currency, will continue to hurt Amazon in the short term. Still, they believe that the company will be able to recover in the long run.

“The Amazon stock price has fallen because the company failed to meet market expectations, despite its accelerated revenue growth. The e-commerce industry has not yet returned to its former level of efficiency, “According to Quilter Cheviot equities research analyst Ben Barringer.

While cloud services have been a growing area for computer businesses, recent signs from Amazon, Microsoft, and Intel Corp (NASDAQ:INTC) hint at reduced spending as prices climb.

Premarket trading for Intel shares increased by approximately 5% after the chipmaker announced layoffs as part of a cost-cutting strategy that would result in savings of $3 billion in the next year.

Analysts, however, are skeptical of the company’s proposed cost-cutting strategies.

Glenn O’Donnell, the director of research at Forrester, said that although cost reductions are essential, Intel should prioritize decreasing expenditure where it would have the most impact while maintaining a significant investment in R&D.

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The Amazon stock price continues to fall as the selloff in technology companies continues to intensify

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