Shares of Amazon fell more than 8 percent on Friday after the online retailer reported slowing online sales growth in the second quarter and said consumers were seeking out cheaper options for purchases.
The commentary from the online shopping behemoth is in line with recent value-conscious consumer behaviour, ahead of retail giant Walmartâs quarterly results later this month.
Amazon CEO Andy Jassy said on a post-earnings call that customers were trading down on price when they could.
The companyâs shares were trading at about $169 before the bell. Amazon was set to lose about $157 billion in market value, if the losses hold.
âConsumer spending trends facing retail peers appear to have finally caught up with Amazonâs P&L,â MoffettNathanson analyst Michael Morton said.
Amazonâs online stores sales rose 5 percent in the second quarter to $55.4 billion, compared with growth of 7 percent in the first quarter.
The companyâs quarterly profit and cloud computing sales, however, beat analystsâ estimates.
Revenue at Amazon Web Services, its cloud unit, rose a better-than-expected 19 percent to $26.3 billion, days after Microsoftâs cloud division Azure fell short of market estimates and sparked more concerns around Big Techâs hefty AI spend.
Seattle-based Amazon is playing catch up with rivals Microsoft, which partners with OpenAI, and Google in developing its own so-called large language models that can respond nearly instantly to complicated queries or prompts.
Amazonâs forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 33.92, compared with Alphabetâs 20.46 and Microsoftâs 30.88, according to LSEG data.
By Amanda Cooper, Savyata Mishra and Deborah Sophia; Editing by Alun John and Shounak Dasgupta
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