The Compound
Why Amazon Has Underperformed
11/2/2025, 6:09:22 PM
Economic Summary
- Amazon (AMZN) is flat year-to-date and has materially underperformed the Nasdaq; renewed AWS growth (target cited ~22%) is framed as necessary for the stock to rejoin the rally.
- Competitive dynamics are shifting: Google Cloud (Alphabet/GOOGL under Thomas Kurian) and Microsoft Azure (MSFT, led by Satya Nadella) are cited as gaining share or developer preference, implying margin and growth pressure for AWS.
- Developer sentiment is presented as a leading indicator: if cutting-edge developers avoid AWS in favor of other platforms, it suggests commoditization of AWS and potential longer-term revenue headwinds for AMZN.
Bullish
- AMZN could rebound if AWS reports ~22% growth
- GOOGL showing cloud momentum under Thomas Kurian
- MSFT benefits from strong enterprise demand for Azure
Bearish
- AMZN perceived as a commodity retail product, reducing developer interest and long-term innovation appeal
- AWS outages damaged trust and helps explain AMZN's underperformance versus the Nasdaq
- Intense competition from Google Cloud and Microsoft Azure is pressuring AWS market share
Bullish tickers
AMZNGOOGLMSFT
Bearish tickers
AMZN
AMZN
Bullish
Could rally if AWS posts ~22% growth; a strong operational rebound would justify participation with the rest of the Nasdaq.
Bearish
Stock flat on year and a five-year underperformer; AWS seen as commoditized retail product, developer avoidance and outages undermine growth prospects.
GOOGL
Bullish
Google Cloud momentum under Thomas Kurian positions Alphabet to capture enterprise cloud share from AWS.
MSFT
Bullish
Azure strength under Satya Nadella makes Microsoft a beneficiary of enterprise cloud demand and competitive pressure on AWS.
People mentioned
Andy JassyThomas KurianSatya Nadella