Amazon shares dropped almost 9% in a single day at the end of October, the most they’ve plummeted in 4 years. This came after the tech giant downgraded it’s forecasts for the holiday season ahead and missed key targets in recent earnings reports.

Alphabet, Google’s parent company, also saw a share decline of approximately 2% after it failed to hit it’s target sales figures. The combined news of these events sent a ripple through financial markets, as investors start to feel concerned this could be a sign of an oncoming slowdown in the tech world.

Positive Outlook Misplaced?

Although several leading Wall Street analysts indicated their long term projections for both firms are still enormously positive, there has been a significant conversation around their short term performance.

Many experts say these results show that the two tech titans are finally starting to face more competition from the tech world, as well as signs of a retail fightback in a battle which Amazon has dominated for close to a decade now.

The fall of 9% in Amazon’s share prices instantly knocked off $80bn in value, causing the company to fall behind Microsoft and Apple in market capitalisation.

Jeff Bezos, the prominent CEO and public figurehead of the company, also saw his personal fortune fall dramatically. As Amazon continues to expand into new markets, they are facing stiff competition and new challenges – and this could be one of the reasons they missed their key sales targets.

Revenue Growth Halved

Growth in revenue from international business, one of Amazon’s primary income streams, more than halved, leading many analysts to wonder if Amazon have reached too far, too fast, taking their eye off the ball and allowing themselves to be assailed on all sides by new, tough competitors. Others argue it’s all part of the long term strategy which has seen Amazon rise from a humble bookseller to a global retail giant.

Across the rest of the technology industry, growth in cloud services (from Microsoft, Amazon and Alphabet) remained solid, although analysts also reported signs of deceleration.

Investors in the technology industry have to consider how this news will impact the market as a whole: what are the long term implications and is this the beginning of a serious slowdown? Or is it just a temporary blip in the remarkable upwards trajectory of these two tech giants?