Amazon Faces Growing Retail Skepticism As AI Capacity Concerns Weigh On Stock
The tech giant’s shares have come under pressure as it also navigates charges it interfered in unionizing attempts by its workers
FollowShares of Amazon.com Inc. (AMZN) have slipped more than 2% in the past five days as the company issued warnings about its ability to meet increasing AI demand, with retail sentiment turning ‘bearish.’
According to a Bloomberg report, Amazon warned investors that it could face capacity constraints in its cloud computing division even as it plans to invest some $100 billion this year.
The company has allocated most of the money toward data centers, homegrown chips and other equipment to provide artificial intelligence services.
Amazon CEO Andy Jassy warned that growth would be “lumpy” because of constraints surrounding the procurement of hardware and electricity, said the report.
Similar concerns have been shared by Microsoft Corp. related to possible data center demand for its AI products.
Sentiment on Stocktwits turned ‘bearish’ from ‘extremely bullish’ a week ago. Message volume was in the ‘low’ zone compared to ‘extremely high.’
AMZN sentiment meter and message volume on Feb 18
Separately, Amazon faces accusations it interfered in unionizing attempts at its North Carolina plant.
According to CNBC, Amazon workers near Raleigh, North Carolina, reportedly voted against unionizing. About 3,276 ballots were cast in the said vote, with 2,447 votes opposing the union and 829 voted in favor. The North Carolina facility employs about 4,700 workers.
The election, termed RDU1, came about after the Carolina Amazonians United for Solidarity and Empowerment (CAUSE) led a campaign over recent years.
“Amazon’s relentless and illegal efforts to intimidate us prove that this company is afraid of workers coming together to claim our power,” the group has said, alleging the company may have interfered with the election.
An Amazon spokeswoman has denied the accusations that it interfered with any election or broke laws.
“We’re glad that our team in Garner was able to have their voices heard, and that they chose to keep a direct relationship with Amazon,” Hardstold told CNBC “We look forward to continuing to make this a great place to work together, and to supporting our teammates as they build their futures with us.”
Amazon stock is up more than 3% year-to-date.
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