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Why Did Amazon (AMZN) Stock Tumble This Week?

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Shares of Amazon (AMZN - Free Report) slumped more than 3.5% in early morning trading Thursday, extending the stock’s recent troubles amid market-wide volatility and direct criticism from none other than President Donald Trump.

Thursday’s dip comes in the wake of Trump lashing out at the e-commerce giant on Twitter, just one day after an Axios report suggested POTUS was “obsessed” with Amazon and wanted to “go after” the company for alleged tax abuses and antitrust violations.

“I have stated my concerns with Amazon long before the Election,” the president tweeted. “Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”

Amazon shares were showing signs of rebounding before the tweet, with the stock gaining about 1.6% in premarket trading. But Trump’s latest callout clearly has investors worried that the White House could target Amazon with direct policy initiatives.

Of course, some critics would be quick to point out that at least some of the backlash towards Amazon seems to be misguided. The Jeff Bezos-led company does, in fact, collect at least some sales taxes from shoppers in all 45 states with a sales tax, rounding out its list with four new states in April 2017.

Other would also argue that Amazon is one of the few remaining things keeping the U.S. Postal Service afloat. Wednesday’s report from Axios noted that Trump’s view of the post office “has been explained to him in multiple meetings” as “inaccurate,” and in fiscal year 2017, USPS revenue from package deliveries increased 12% year over year—making it one of the agency’s lone bright spots.

Still, Amazon’s reported plans to launch its own full-scale delivery service poses a serious threat to the Postal Service, along with private delivery companies like FedEx (FDX - Free Report) and UPS (UPS - Free Report) .

Trump’s criticism of Amazon also comes amid significant volatility in the technology sector and broader public skepticism of tech companies. Investors have been quick to ditch tech stocks over the past two weeks as users respond to renewed data privacy concerns—inspired by Facebook’s Cambridge Analytica scandal.

Ad-driven internet companies, including Facebook, Twitter , and Alphabet (GOOGL - Free Report) , have been among the most affected.

Meanwhile, analyst sentiment surrounding Amazon’s near-term prospects remains mixed. Within the last 60 days, we have witnessed 17 revisions to the company’s current-year earnings estimates, with eight of those coming in positive and nine of them negative. The Zacks Consensus Estimate for the company’s annual earnings has inched just a penny higher over that timeframe.

This mixed estimate revision activity has kept AMZN at a Zacks Rank #3 (Hold). However, the stock is sporting an “A” grade for Growth in our Style Scores system and promises to continue its rapid expansion this year. Current estimates are calling for earnings and revenue growth of nearly 87% and 32%, respectively, in fiscal 2018.

Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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