Amazon Stock Suffers Sharpest Slump Since 2006 Amid Divergent Investor Bets

Amazon's stock has been underperforming benchmark indices for some time now, but things have taken a turn for the worse in recent weeks. The e-commerce giant saw its shares drop by about 18% over a nine-day period ending last Friday, marking its steepest slump since 2006.

Things took an even more interesting turn when it was revealed that Berkshire Hathaway had trimmed its holding in Amazon by 75%, while Pershing Square increased its stake by 65%. This divergent betting has left markets puzzled, with Amazon's steady business growth last year failing to drive a meaningful rally in the stock.

The sharp selloff in Amazon's shares was triggered by the company missing sales and profit targets for the fourth quarter, as well as announcing plans to spend a whopping $200 billion on capital expenditures this year, mainly on AI-related capacity expansion. This capex is the highest among Big Tech peers and represents a 52% rise from what Amazon spent last year.

Despite the sharp decline in Amazon's stock price, some investors remain bullish on the company. On Stocktwits, retail sentiment for AMZN remained 'bullish', unchanged since last Friday, with users expressing confidence in the underlying business and its growth prospects.