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Amazon Shares Tumble Amid Slowing Online Sales Growth

Amazon shares fell over 8% on Friday after the company reported slower online sales growth and increasing consumer demand for cheaper options

In anticipation of Walmart’s quarterly results later this month, the online purchasing behemoth’s commentary is consistent with recent consumer behavior prioritizing value.

During a post-earnings call, Andy Jassy, the CEO of Amazon, stated that consumers negotiated prices when they could.

Andy Jassy, the CEO of Amazon | source, CNBC

Before the bell, the company’s shares traded at approximately $169. If the losses persist, Amazon is expected to experience a decline in market value of approximately $157 billion.

Michael Morton, an analyst at MoffettNathanson, stated that the consumer spending trends that retail rivals are experiencing have finally caught up with Amazon’s P&L.
The revenues of Amazon’s online stores increased by 5% to $55.4 billion in the second quarter, as opposed to a 7% increase in the first quarter.

Nevertheless, the company’s quarterly profit and cloud computing sales exceeded analysts’ expectations.

In the days following Microsoft’s Azure’s failure to meet market expectations and the subsequent escalation of apprehensions regarding the significant AI expenditures of Big Tech, Amazon Web Services, its cloud division, experienced a 19% increase in revenue to $26.3 billion, surpassing expectations.

Microsoft Azure | Source, Paradise Computing

Amazon, headquartered in Seattle, is currently catching up with its competitors, Microsoft and Google, in developing its own “large language models.” These models are capable of responding to complex queries or prompts in a nearly instantaneous manner. Microsoft and Google are partners with OpenAI.

OpenAI | Source, Artnet News

According to LSEG data, Amazon’s forward price-to-earnings ratio for the next 12 months was 33.92, a common benchmark for valuing equities. Alphabet’s ratio was 20.46, and Microsoft’s was 30.88.

James Emmanuel

James is a Computer Science student with a robust foundation in tech and a skilled DevOps engineer. His technical expertise extends to his role as a news reporter at Protechbro, where he specializes in crafting well-informed, technical content that highlights the latest trends and innovations in technology.

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