Shares of Amazon (NASDAQ:AMZN | AMZN Price Prediction) are down almost 2% in midday trading Thursday, likely due to the 600-point drop in the stock market after Walmart (NYSE:WMT) warned of slowing sales and profits in 2025.
The $4.40 per share decline means Amazon’s former CEO and current executive board chairman Jeff Bezos is suffering a $3.9 billion hit to his net worth. He has lost approximately $18 billion since the beginning of February when AMZN stock hit an all-time high of $242.52 per share.
Walmart weighs on the market
Amazon and Walmart are close competitors, of course. If the retail giant is feeling the pinch from cash-strapped consumers then it is quite possible Amazon will as well.
Walmart reported fourth quarter earnings before the market opened today and though it delivered a strong financial performance, it also said the coming year would be soft. Sales are expected to grow 4% while profits would rise 5%, which fell short of Wall Street’s expectations.
Rising inflation seems to be the biggest concern, though a global trade war and tit-for-tat tariffs are also a concern. Despite most of Walmart’s problems being made in the U.S., it said it is not immune from trade duties, especially those imposed on Canada and Mexico.
Amazon is also at risk of widening trade tensions because of the amount of business it does overseas as well as the large number of products that are shipped into the U.S.
Giving it away
Bezos is the world’s third richest man. He has a net worth of $236.4 billion, though when he woke up this morning he was $3.9 billion richer.
As of November 2024, he owns 909,710,000 shares of Amazon stock. And at today’s market open, that would have been worth $206.2 billion, but it has since been shaved as AMZN stock fell throughout the morning.
Yet Amazon and Walmart don’t walk lockstep, which highlights the heavy brick-and-mortar footprint that Walmart carries. Although Amazon has opened up numerous physical stores, they are much smaller than its rival’s supercenters and are far fewer in number. Walmart operates in excess of 10,600.
Bezos has also been selling off shares of his Amazon holdings to finance his charitable giving. In 2020, for example, he pledged to donate $10 billion to his Bezos Earth Fund and has so far given $2 billion, and last year he committed to sell $5 billion worth of stock, or 25 million shares. With nearly 1 billion shares in his portfolio, the 25 million share sale won’t change his net worth all that much.
Key takeaway
It wasn’t just AMZN stock that was being weighed down by Walmart’s news. Target (NYSE:TGT) stock also fell by a like amount. They could just as easily rebound in the near future.
Elon Musk and President Trump are discussing sending every American taxpayer a $5,000 check as a “dividend” for the savings the Department of Government Efficiency is generating as it roots out fraud, waste, and abuse in the government.
That could send consumers on a spending spree, though it does carry the risk of reigniting price inflation.
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