Jeff Bezos has sold shares in the company he founded, Amazon.com Inc. (NASDAQ: AMZN), before. But in February, the size of his sales was extraordinary. He sold approximately 50 million shares, which were worth $8.5 billion. The Financial Times suggests he may have done so because Amazon’s stock has had an amazing run, as have the shares of several other mega-cap tech corporations.
Bezos is the second richest person in the world, with a net worth of $202 billion, much of which is in Amazon stock. Amazon’s market cap is $1,86 trillion, which makes it the sixth most valuable stock traded on U.S. exchanges. Microsoft Corp. (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Nvidia Corp. (NASDAQ: NVDA), Saudi Aramco, and Alphabet Inc. (NASDAQ: GOOG) are ahead. Apple’s share might rise if it can cut an AI deal with Google.
Amazon’s shares are up 81% in the past year, compared to 40% for the Nasdaq. It has outperformed other tech stocks like Apple and Alphabet. When stocks jump at a pace like Amazon’s, investors worry they are ready for a reset–down.
Amazon’s recent earnings have been good but not extraordinary. In the fourth quarter of last year, revenue rose 14% to $170 billion, and net income soared from $278 million to $10.6 billion. One worry about the results was the modest increase in revenue at AWS, Amazon’s massive cloud business. Its revenue rose only 13% to $24.2 billion, and operating income rose 38% to $7.2 billion. Cloud computing is among the most competitive sectors in the tech world.
Amazon has what could be a significant weakness. It is not a major AI play like Microsoft and Nvidia. Apple’s lack of AI products is one reason its stock has done so poorly this year. Amazon must show that it is more than an e-commerce and cloud computing company.
Why did Bezos sell such a large number of shares? Perhaps he thinks Amazon’s stock is near a peak.
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