Amazon Shares Lagging Behind Nasdaq 100 in 2025 - Here’s Why It Matters

Amazon's stock performance hits a rough patch as it trails the tech-heavy index.

Market Reality Check

The e-commerce giant finds itself playing catch-up while the broader tech sector charges ahead. Investors watch closely as growth metrics fail to keep pace with index benchmarks.

Performance Gap Widens

Quarterly earnings show Amazon struggling to match the Nasdaq 100's momentum. Supply chain costs bite into margins while cloud division growth slows more than expected.

Wall Street's Favorite Pastime: Watching Titans Stumble

Analysts point to increased competition and regulatory pressures dragging on performance. The stock's underperformance becomes dinner conversation across hedge funds and family offices alike.

Tech investors shrug—another day, another billionaire losing pocket change while the rest of us wonder why our index funds still outperform their stock picks.

Amazon’s e-commerce model has become less attractive with the rise of AI

E-commerce still delivers the bulk of Amazon’s revenue. Over the years, its heavy spending across many areas, from AWS to Whole Foods, has helped attract growth-oriented shareholders. Last week, the company said it plans to more than double the number of cities where it offers same-day grocery deliveries, underscoring its continued commitment to logistics and retail.

But with AI now the dominant topic in markets, that diversified model is drawing less enthusiasm. Investors watching cloud growth are comparing AWS against faster-growing competitors and rewarding firms most closely tied to AI infrastructure and services.

By the numbers, AWS remained the market leader in renting computing power but posted 17% revenue growth in Q2. That pace lagged Microsoft’s Azure, where sales climbed 39%, and Google Cloud, which rose 32%. The contrast has sharpened the debate about whether AWS is losing share and whether Amazon’s AI spending is paying off quickly enough.

Capital is also flowing to other companies building out AI capacity. Shares of Oracle Corp. and Nvidia-backed CoreWeave Inc. have surged this year as they scale up computing resources, based on earlier reports by Cryptopolitan. Oracle deepened its MOVE into AI services with a deal last month to provide OpenAI with an additional 4.5 gigawatts of U.S. data-center power, and its stock is up almost 50% this year. 

Amazon’s AI chip leader moved to Arm

In a separate move that underscores shifting dynamics in the chip world, Arm Holdings has hired an Amazon artificial intelligence chip leader to advance its own silicon plans. Rami Sinno, who worked on Amazon’s in-house AI chips Trainium and Inferentia, designed to build and run large AI systems, has joined Arm, a person familiar with the matter said on Monday.

Arm historically has not produced complete chips. Chip makers including Apple and Nvidia use Arm technology in their processors, a model that has made Arm central to smartphones and increasingly to data-center and AI hardware.

That stance is changing. In July, Arm said it WOULD invest profits to develop chips and similar components. Hiring Sinno signals the company’s intent to move further into full-chip development as demand for AI accelerators, custom silicon, and power-efficient designs keeps rising.

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