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Amazon slumps as tech selloff worsens

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Oct 28 (Reuters) – Shares of Amazon.com Inc (AMZN.O) fell around 13% in pre-market trading as the online retailer is on course to lose its place in the corporate club. trillion dollars, after forecasting holiday quarter sales under Wall Street Estimates.

The bleak outlook has worsened this week’s tech selloff amid fears of a looming recession, weighing on shares of Meta Platforms Inc (META.O), Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O). ).

Shares of Amazon, which were down 12.8% at $96.77, were trading at their lowest level since March 2020.

However, Apple Inc (AAPL.O) shone amid a host of dim lights in the Big Tech space as the iPhone maker said it expects holiday quarter revenue increased by less than 8%, against estimates of 3%.

Many see the megacaps as indicators of where U.S. businesses are in a year when inflation soared, prompting the U.S. Federal Reserve to pass a series of huge rate hikes that bruised markets.

Analysts are concerned that macro factors, including a strong dollar, will continue to hit Amazon in the near term, but over a longer period the retailer should be able to rebound.

“Despite accelerating revenue, Amazon was market-cut after missing expectations. Efficiency has yet to return to e-commerce,” said Ben Barringer, equity research analyst at Quilter Cheviot. .

While the cloud services segment has seen strong and sustained growth for tech companies, indications for Amazon, Microsoft and Intel Corp (INTC.O) this week point to lower investment as costs rise.

Intel shares rose about 5% premarket after the chipmaker said its cost-cutting plan included layoffs and is expected to cut costs by $3 billion next year.

However, analysts are cautious about how the company plans to cut costs.

Cost reductions are needed, but Intel needs to focus on cutting spending in the right places and keeping research and development investments high, said Glenn O’Donnell, research director at Forrester.

Reporting by Akash Sriram and Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta

Our standards: The Thomson Reuters Trust Principles.

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