Amazon shares tumble on slowing online sales growth

:Shares of Amazon.com fell nearly 10 per cent on Friday after the company 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 behavior, ahead of retail giant Walmart’s 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 company’s shares were trading at about $166, with the stock among the biggest drags on the Nasdaq. Amazon was set to lose about $188 billion in market value, if the losses hold.
“Consumer spending trends facing retail peers appear to have finally caught up with Amazon’s P&L,” MoffettNathanson analyst Michael Morton said.
Amazon’s online stores sales rose 5 per cent in the second quarter to $55.4 billion, compared with growth of 7 per cent in the first quarter.
The company’s quarterly profit and cloud computing sales, however, beat analysts’ estimates.
Revenue at Amazon Web Services, its cloud unit, rose a better-than-expected 19 per cent to $26.3 billion, days after Microsoft’s cloud division Azure fell short of market estimates and sparked more concerns around Big Tech’s 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.
Amazon’s forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 33.92, compared with Alphabet’s 20.46 and Microsoft’s 30.88, according to LSEG data.