Amazon Faces Historic Nine-Day Losing Streak
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 hours ago
0mins
Should l Buy AMZN?
Source: Benzinga
- Market Capitalization Drop: Amazon has faced a historic nine-day losing streak, resulting in a staggering $400 billion loss in market capitalization, with shares declining 18.19% during this period, reflecting investor concerns over massive capital expenditure targets for AI infrastructure.
- Psychological Phenomenon: Analyst Nicholson suggests that the market reaction is more of a psychological phenomenon rather than a fundamental change in the company's outlook, emphasizing that “the world between our ears is changing while the world around us stays the same.”
- Anxiety Over AI Returns: Investors are anxious about the timeline for returns on AI investments, with Nicholson characterizing the current trading environment as a “game of chicken” between big tech and Wall Street, indicating a high-stakes standoff as investors await tangible positive ROI.
- Enterprise Stability and SaaS Moat: Nicholson reassures that while AI may pressure traditional SaaS providers, enterprise clients remain risk-averse, asserting that current market volatility reflects sentiment rather than a new negative reality for the AI sector.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 198.790
Low
175.00
Averages
280.01
High
325.00
Current: 198.790
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant AI Budget Increase: Amazon plans to raise its capital expenditures to $200 billion for 2023, significantly exceeding Wall Street's expectation of $150 billion, which will decelerate free cash flow and impact short-term stock performance.
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- Significant AI Budget Increase: Amazon plans to raise its capital expenditures to $200 billion for 2023, significantly exceeding Wall Street's expectation of $150 billion, which will decelerate free cash flow and impact short-term stock performance.
- Strong AWS Growth: Amazon Web Services (AWS) generated $35.6 billion in revenue during Q4, reflecting a 24% year-over-year growth, with a staggering $244 billion backlog indicating robust market demand and substantial future growth potential.
- Strategic Partnership Advantages: Amazon's collaboration with Anthropic is establishing a cost-efficient, vertically integrated AI ecosystem, and while initial investment returns may lag, this strategy is expected to enhance the company's competitive edge and market position in the long run.
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- Profit Strategy Shift: Walmart has focused on driving profits over sales in recent years, particularly investing in advertising and third-party delivery to compete with Amazon, aiming to enhance market share and overall profitability.
- Consumer Spending Trends: With the U.S. household savings rate dropping to 3.5%, indicating consumers are spending from savings, Walmart may benefit from this trend, especially in groceries, attracting an increasing number of high-income shoppers.
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- Strategic Technology Shift: With the new funding, Render plans to hire additional technical staff to develop new features while testing the use of its own servers to reduce costs and enhance customer efficiency, particularly for clients like Alibaba and Shopify.
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- Strategic Technology Shift: Render is testing the use of its own servers to reduce costs and improve service efficiency, a strategic pivot that could provide customers with more competitive pricing while enhancing the company's control over its infrastructure.
- Intensifying Market Competition: As OpenAI's ChatGPT drives increased demand for cloud computing, Render emerges as a beneficiary, particularly as companies seek mature alternatives to Heroku, underscoring its importance and potential in the industry.
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