Amazon's stock dropped more than 8% on Friday following the company's announcement that online sales growth in the second quarter had slowed and that customers were looking for less expensive options, according to Reuters.
Ahead of retail powerhouse Walmart's quarterly results later this month, the comments from the online shopping behemoth are consistent with current value-conscious consumer behavior.
During a call following the company's profits, Amazon CEO Andy Jassy stated that consumers were negotiating prices where they could.
Before the bell, the company's shares were trading for roughly $169. If the losses continue, Amazon's market value is estimated to drop by roughly $157 billion.
Analyst Michael Morton of MoffettNathanson stated, "Consumer spending trends facing retail peers appear to have finally caught up with Amazon's P&L."
Sales through Amazon's online store increased by 5% to $55.4 billion in the second quarter, after growing by 7% in the first.
However, the company's sales of cloud computing and quarterly earnings exceeded analysts' expectations.
Days after Azure, Microsoft's (MSFT.O) open-tab cloud company, missed market estimates and raised fresh questions about Big Tech's heavy AI spending, revenue at Amazon Web Services, its cloud arm, increased by a better-than-expected 19% to $26.3 billion.
With its own "big language models" that can react almost instantaneously to complex questions or suggestions, Seattle-based Amazon is catching up to rivals Microsoft, which collaborates with OpenAI, and Google.
In comparison, Alphabet's and Microsoft's forward price-to-earnings ratios for the next 12 months were 20.46 and 30.88, respectively, according to LSEG data. Amazon's ratio was 33.92.
