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Jeff Bezos Is Worried About Tech Valuations, and It’s Weighing on Amazon Stock

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Jeff Bezos has given investors new reason to worry about the valuations of tech stocks.

David Ryder/Getty Images

Technology investors hoping for a quick rebound to new highs may be in for a longer wait.

Over the weekend, Jeff Bezos warned that when the “bull run” in technology ends, “the lessons can be painful.”



founder’s comments came after a difficult week for the e-commerce giant. Last Friday,


stock tumbled 14% a day after the company gave a disappointing profit and revenue forecast for the June quarter.

Wall Street has tried to calm investors. More than 90% of analysts, maintained their Buy or Overweight ratings on Amazon, citing the strength in its cloud-computing unit.

But the nearly universal bullishness is out of line with the more cautious tone that Bezos expressed on Twitter. On Saturday, Bezos replied to, and seemed to affirm, a tweet by venture capitalist Bill Gurley, who said that technology valuations have shifted to more conservative measures based on profits—not the crude revenue multiples of prior years.

On Monday, despite a strong day for tech stocks, Amazon shares were essentially, flat, rising just 0.2% against the

Nasdaq Composite’s
1.6% gain.

In a world where most fund managers and company executives mainly “talk their book,” or speak only positively of companies they own, it’s refreshing to hear Bezos talk openly and honestly. The internet entrepreneur is willing to tell it like it is about technology valuation risk—even if it means his large holdings in Amazon may suffer.

Bezos and Gurley’s thoughts about valuations is also similar to another famous technology investor. In a podcast interview last week, Dan Benton, who once ran the world’s largest technology hedge fund, warned that rising inflation and higher interest rates would be detrimental to the market.

“The single most important thing to stocks is the direction of interest rates,” he said. “We are in an environment right now we have not seen since the 1970s with respect to inflation.”

Benton added that he saw “downside” in


shares given its high valuation relative to its growth rate. He was even more pessimistic over highflying smaller names with little to no profits. “This is not a good time to be investing in a fad,” Benton said.

Write to Tae Kim at

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