Amazon's often teflon stock (AMZN) is proving to be anything but as the peak holiday shopping season nears its conclusion.
With Monday's 1.7% decline, shares of the tech giant dropped below its 200-day moving average (a key measure of market sentiment) on a closing basis for the first time since Nov. 1 on Monday. Amazon founder Jeff Bezos lost $3 billion in net worth in Monday's sell-off.
Amazon has closed down seven out of the past nine sessions, per Bloomberg data. Shares are up slightly in pre-market trading Tuesday.
The stock is down 4.7% for December, worse than the Nasdaq Composite's 4% decline.
Amazon's stock is also piling up other unwelcome, noteworthy awards.
Shares are down 9.6% from their recent peak on Nov. 18, nearing correction zone, defined as a decrease of 10% off the highs.
Meanwhile, the stock is the second worst component of the closely watched FAANG (Facebook, Amazon, Apple, Netflix, and Google) complex month-to-date, trailing only a 7.4% plunge in fellow high multiple tech stock Netflix.
The sell-off in Amazon shares likely reflect several factors.
For starters, the market hasn't been receptive to big-cap tech stocks since the Federal Reserve's hawkish pivot on policy earlier this month. Pros generally agree tech stocks like Amazon have benefited greatly from low interest rate policy these past few years, which has helped pushed up their stock trading multiples.
Aside from that, with the Omicron variant spreading globally there is increasing angst on how the holiday season will end for big retailers. Already, weakness has crept up into credit and debit card spending data and restaurant bookings.
To be sure, Wall Street isn't super down on Amazon's prospects even if the stock doesn't reflect that ongoing optimism.
JPMorgan analyst Doug Anmuth expects Amazon to deliver a strong holiday season. The analyst recently reiterated his Overweight rating on Amazon's stock and $4,350 price target, suggesting 32% upside from current levels.
"Key drivers this holiday season include: 1) Amazon has doubled its fulfillment network since the pandemic began and is no longer space-constrained; 2) early timing of holiday promotions indicate a strong inventory position; 3) return to full Prime 1-day and increased same-day delivery enhance last-mile execution; 4) Amazon has managed labor issues by creating ~125k new fulfillment/transportation positions and hiring ~150k seasonal workers; 5) Prime flywheel creates a compelling offering; 6) further gains in under-penetrated verticals; & 7) continued strength of third-party (56% of units in 3Q21) & FBA expanding selection & pricing," explained Anmuth.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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