Amazon stock sinks, as Microsoft's 'worrisome' cloud outlook prompts UBS price target cut
Shares of Amazon.com Inc. (AMZN) sank 2.3% in morning trading Wednesday, to pare earlier losses of as much as 5.0%. The stock was one of the top 5 decliners in the S&P 500's consumer discretionary sector (XLY), but the reason for the selloff isn't about the e-commerce giant's retail business. The stock's selloff comes after Microsoft Corp. (MSFT) warned late Tuesday about slowing growth in its cloud business. Meanwhile, Microsoft shares shed 3.0%. Amazon's cloud business, or AWS, generated $16.11 billion in sales during the third quarter, or 14.5% of total sales, while AWS operating income of $4.88 billion was 101% of total operating income of $4.85 billion. UBS analyst Lloyd Walmsley reiterated his buy rating on Amazon, but cut his stock price target to $118 from $121 and lowered his 2023 estimate for earnings per share to $1.46 from $1.58, saying the pace of deceleration of Microsoft's cloud business was "worrisome." Amazon's stock has slumped 22.0% over the past three months, while the Consumer Discretionary Select Sector ETF has shed 5.0% and the S&P 500 has gained 2.7%. Microsoft shares have shed 6.3% the past three months.
(END) Dow Jones Newswires
January 25, 2023 11:10 ET (16:10 GMT)
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