Amazon, Alphabet’s growth engines sputter

SAN FRANCISCO: The growth engines of Amazon.com Inc and Alphabet Inc, the world’s largest Internet companies, sputtered last quarter, and after weeks of stock market jitters, investors were in no mood to give them a pass.

Amazon, the biggest online retailer, reported a second consecutive quarter of sales that fell short of estimates – the first back-to-back revenue miss in almost four years.

The company on Thursday also gave a disappointing revenue and profit forecast for the busy holiday period, sending shares down as much as 9.4% in extended trading. Even its highly profitable cloud-com- puting business, Amazon Web Services, didn’t grow as fast as it had in the previous three months.

Alphabet’s third-quarter sales missed analysts’ expectations and revenue growth from its main Google sites, including Search and YouTube, came in at 22%, slower than the prior period.

Shares in Alphabet, the world’s largest digital advertiser, dropped 5% in pre-market trade. Amazon was down 8% at 4:50am in New York yesterday.

In a time of low interest rates, Amazon and Google have offered investors the chance to hitch a ride on the fast-growing e-commerce, dig- ital advertising and cloud-computing markets buoyed by a steady global economy. Amazon shares have roughly tripled in the past three years, while Alphabet is up more than 50%.

Now interest rates are rising, giving investors other options to generate returns, while clouding the outlook for the economy. Add in the recent stock market rout, and the tech companies had little room to bobble their results.

“Given the current market backdrop, your earnings report has to be perfect or your stock will get punished,” said Vic Anthony, an analyst at Aegis Capital Corp.