Amazon's stock is facing downward pressure due to a combination of factors impacting the broader tech sector. The Magnificent Seven, a group of leading tech companies including Amazon, have seen their profit growth decelerate, raising concerns about their high valuations. This slowdown in earnings growth, coupled with increased spending, has led to a decline in their stock prices. Amazon's shares fell 1% in premarket trading, contributing to a broader decline in Nasdaq 100 futures, which slipped 0.6% as of 8:28 a.m. in New York. Additionally, disappointing earnings reports from other tech giants like Alphabet and Advanced Micro Devices have further weighed on the sector, exacerbating the negative sentiment.
The tech-heavy Nasdaq Composite and the S&P 500 both opened in the red on February 5, 2025, as mixed quarterly results from major tech firms led to a decline in investor confidence. Alphabet's shares dropped 7% after reporting lower-than-expected cloud revenue, while Apple faced pressure due to potential regulatory challenges in China. These developments have contributed to a broader sell-off in tech stocks, impacting Amazon and other members of the Magnificent Seven. The ongoing trade tensions between the U.S. and China, along with the U.S. trade deficit reaching its highest level since the pandemic, have added to the market's volatility.
The Direxion Daily AMZN Bull 1.5X Shares ETF (AMZU) fell to $48.25, down 4.34% as of 10:00 AM ET on February 5, 2025.