Amazon’s (AMZN) stock has shown a slight increase of 0.5% this week, but beneath this modest uptick, investor sentiment is turning notably negative. The company’s social sentiment score has dipped from a neutral-bullish 0.12 to a concerning negative 0.15, reflecting a growing unease among retail investors. This shift marks a stark contrast to the sentiments enjoyed by competitors such as NVIDIA (NVDA), Alphabet (GOOGL), Meta Platforms (META), and Apple (AAPL), all of which are basking in bullish or neutral sentiments.
The troubling mood surrounding Amazon intensified following its announcement to reduce its workforce by 14,000 to 15,000 jobs starting January 28. This news has particularly affected divisions within AWS, retail, Prime Video, and human resources. CEO Andy Jassy has attributed these cuts not solely to financial motivations, but to the cultural shifts necessitated by increasing AI adoption.
The company’s latest financial disclosures show a significant push in capital expenditures, which rose 55% to $35.1 billion in the third quarter. However, despite achieving a 13.4% revenue growth, operating income saw only a marginal increase of 0.06%. This discrepancy has drawn skepticism from investors, especially as Amazon’s year-to-date return of 4.1% lags far behind rivals, with NVDA at 27.5% and GOOGL at an impressive 67%. Alarmingly, this occurs despite an overwhelming majority of analysts maintaining a Buy rating on the stock.
Concerns were echoed on social media platforms, particularly in a viral Reddit post from r/wallstreetbets, which highlighted the anxiety amongst retail investors regarding the layoffs. One comment raised alarms about AI’s role in replacing entire departments, noting its stark difference from previous layoffs that typically impacted individual roles. Another commentator questioned the rationale behind cutting 30,000 jobs while simultaneously investing heavily in AI infrastructure, suggesting that such moves may compromise the company’s future growth.
In light of these developments, retail investors appear to be reconsidering their “hands-off” investment strategies and are starting to seek more active engagement with their portfolios. Despite Amazon’s robust fundamentals, the current combination of layoffs and rising AI-related concerns has cast a shadow over its once-bright growth narrative. The current sentiment reflects a broader anxiety about the company’s strategy moving forward, leaving many traders uncertain about its potential to compete effectively against leading tech stocks.