Dow, S&P 500, Nasdaq sell-off builds as tech rout continues, bitcoin plunges

The performance of Amazon’s ( AMZN ) cloud business, AWS, will be scrutinized when its earnings report is released after Microsoft ( MSFT ) shares fell last week due in part to a slowdown in cloud growth.

Bloomberg reported:

That wasn’t an issue for Amazon’s October earnings, as its shares rose nearly 10% after Amazon Web Services, also known as AWS, posted better-than-expected revenue. But now fear is rippling across the tech sector, and Amazon investors are increasingly concerned that the slowdown in Microsoft Azure points to broader weakness for cloud providers.

“It’s unclear how much of Microsoft’s disappointment may be due to company-specific issues and how much may reflect an overall slowdown in the cloud space,” said David Miller, chief investment officer of Catalyst Funds, which holds Amazon shares in various portfolios. “If it’s the latter, this may continue.”

… Amazon’s results come against the backdrop of anti-software sentiment weighing on the entire tech sector at a time when investors are trying to sort out the winners and losers of the hundreds of billions of dollars spent developing artificial intelligence.

Microsoft’s aggressive capital spending on AI, along with slowing Azure growth, has raised new questions about when these investments will pay off more substantially.

“It’s really about what’s priced in the stock, and I think it’s about what’s starting to price. [Microsoft] “It had a higher growth rate, which is always a little bit dangerous,” said Melissa Otto, head of technology, media and telecommunications research at Visible Alpha. “We haven’t really seen Amazon take off in the same way.”

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