Amazon.com Inc (AMZN) shares took a tumble on Monday, driven by a double whammy of negative news. First, Wells Fargo analyst Ken Gawrelski downgraded Amazon from Overweight to Equal-Weight, lowering the price target from $225 to $183. Gawrelski attributed this decision to slowing growth and intensifying competition in the e-commerce market. He acknowledged Amazon’s potential for margin expansion but warned that this growth could be capped through the first half of 2025.
Adding fuel to the fire, a federal judge ruled in favor of the Federal Trade Commission (FTC), allowing their antitrust lawsuit against Amazon to proceed. The lawsuit, which alleges that Amazon is abusing its marketplace dominance to inflate prices, overcharge sellers, and stifle competition, will now move forward with a trial scheduled for October 2026. The FTC believes that Amazon’s actions have harmed both consumers and sellers, leading to higher prices and reduced competition.
The judge’s decision comes after several state attorney generals also accused Amazon of violating antitrust laws. While the judge permitted some of these state claims to move forward, he dismissed claims made by New Jersey, Pennsylvania, Oklahoma, and Maryland.
The combination of the Wells Fargo downgrade and the FTC lawsuit approval has created a storm for Amazon’s stock. At the time of publication, AMZN shares were down 3.06% at $180.80. The coming months will be crucial for Amazon as it navigates the challenges of slowing growth, increased competition, and the looming antitrust trial.
