Personal Finance

Why Amazon.com Stock Fell Monday

Boxes in an Amazon fulfillment center

What happened

Shares of e-commerce and cloud-computing company Amazon.com (NASDAQ: AMZN) fell sharply on Monday. The stock ended the trading day down about 5.1%.

Tech stocks in particular were hit hard Monday. Further, the popular "FAANG" stocks -- Facebook (NASDAQ: FB) , Amazon, Apple (NASDAQ: AAPL) , Netflix (NASDAQ: NFLX) , and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) (parent company of Google), were all slammed as well. These stocks fell 5.7%, 5.1%, 4%, 5.5%, and 3.9%, respectively.

Boxes in an Amazon fulfillment center

Image source: Amazon.com.

So what

Highlighting the pullback in tech stocks, the tech-heavy Nasdaq Composite declined 2.7% on Monday -- worse than the S&P 500 's 1.5% decline. This extends a broad sell-off in tech stocks that started gaining momentum in early October. Investors seem less willing to risk money on stocks with pricey valuations.

Amazon, Facebook, Netflix, and Alphabet are trading lower on Monday primarily due to market headwinds. But bearishness toward Apple on Monday was likely magnified by yet another rumor that the tech giant is cutting production orders for its new iPhones .

Amazon's decline on Monday puts shares down about 25% since the beginning of October. The stock's decline during this period has been fueled both by a sell-off in tech stocks and Amazon's worse-than-expected revenue guidance for its fourth quarter.

Now what

Turning to the e-commerce giant's fundamentals for some clarity amid this volatility, Amazon's third-quarter net sales and earnings per share came in at $56.6 billion and $5.75, respectively -- up significantly from $43.7 billion and $0.52 in the year-ago quarter. However, the company's guidance for fourth-quarter net sales of $66.5 billion to $72.5 billion failed to impressed investors. This implies 10% to 20% year-over-year growth, down from sales growth of 29% in Q3.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Amazon, Apple, Facebook, and Netflix. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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