Today was not a good day to be online retail giant Amazon (AMZN). Not only did some disastrous news come out about online retail in general, but Amazon in particular lost a big part of its operations. Worse yet, one of the biggest names Amazon had in generative artificial intelligence (AI) decided to leave. That news did Amazon no favors, and shares slipped fractionally in Tuesday afternoon’s trading.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
The man in question, Vasi Philomin, was the vice president of generative AI at Amazon Web Services. Philomin had a direct hand in Amazon’s efforts on generative AI, including that he “…built Bedrock from the ground up, positioning it as a key tool for enterprise AI development,” reports noted.
Philomin told Reuters that he had already joined another company, though he would not spill the tea on which company has landed him. Amazon moved rapidly to try and fill in the gaping hole in its AI development, posting vice president Rajesh Sheth to take over some of Philomin’s duties. Sheth was previously known for heading up the Elastic Block Store. Amazon will need someone in place to do the job, as reports suggest that Amazon is working to renovate Bedrock in a move to take on competitors in the field.
Online Shopping Takes a Hit
Meanwhile, reports noted that online shopping in general is starting to take a blow, mostly as a result of the ongoing trade war between the United States and, well, most of the world. While portions of that trade war are being ironed out almost as fast as they come to light, other portions are taking a lot longer. Canada, for example, is proving an unexpectedly standoffish trade partner. But the fallout is already starting to hit.
“Steep declines in online shopping,” is how one report put word from a study from Alix Partners. The study also pointed to modified shipping and return policies, all largely connected to that tariff policy. A range of products have already seen steep drops: office supplies are down 13%, sporting goods are down 12%, and a laundry list of products—furniture, large electronics, cosmetics and more—fell 10% under the Alix Partners study.
Is Amazon a Good Long-Term Investment?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 47 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 9.7% rally in its share price over the past year, the average AMZN price target of $242.98 per share implies 10.51% upside potential.
