Amazon Stock Fell 7.9% in May


Jun. 3 2019, Updated 12:12 p.m. ET

Amazon stock

Amazon (AMZN) shares fell 7.9% in May. Despite the recent pullback, Amazon stock has gained more than 18.0% since the beginning of 2019. Currently, Amazon stock is trading at $1,775.07, which is 36.0% above its 52-week low of $1,307.0 and 13.4% below its 52-week low of $2,050.5.

Amazon shares have gained 9.0% in the last 12 months and 47.0% since the beginning of 2018. The stock has been impacted by weakness in the tech sector. The escalating trade war between the US and China (FXI) drove tech indices lower in the last month.

The Technology Sector ETF (XLK) and the Power Shares QQQ ETF (QQQ) fell 8.7% and 8.2%, respectively, in May. Amazon accounts for 10.2% of QQQ.

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Declining international revenues

Amazon announced its first-quarter results in April. The company reported sales growth of 17.0% YoY (year-over-year) to $59.7 billion. While the sales growth has been impressive, it was slower for the fourth consecutive quarter.

Amazon’s sales growth has decelerated due to a slowdown in international markets and marginal growth in its Whole Foods business segment. In the first quarter, Amazon’s sales were mainly driven by Amazon Web Services.

Amazon’s subscription revenues rose 40.0% YoY to $4.4 billion in the first quarter and accounted for 7.4% of the total sales. Amazon has over 100 million Prime subscribers. The subscribers spend a higher amount on the platform compared to regular customers.

Amazon is also the third-largest advertising platform in the United States behind Google (GOOGL) and Facebook (FB), according to e-Marketer. Product searches around the world are happening more often on Amazon’s platform than on Google’s platform. The ad revenues will likely be a key driver for Amazon going forward.


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