Institutional Investors Retreat from Amazon Shares

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Amazon is navigating significant headwinds as 2026 begins. Fresh data reveals a trend of professional money managers actively scaling back their holdings in the e-commerce behemoth. This follows a year of notable underperformance relative to the broader market in 2025. The simultaneous emergence of unexpected operational challenges raises a critical question: is confidence among major investors in the company's near-term prospects beginning to fade?

Beyond financial flows, corporate operational hurdles are drawing attention. Amazon has been compelled to make a rare exception to CEO Andy Jassy's stringent office-attendance mandate. Due to substantial delays in U.S. visa processing, the company is temporarily permitting its employees in India to work remotely until March 2, 2026.

This concession underscores the logistical complexities the firm is confronting within its key global technology hubs, marking a significant deviation from its established corporate culture.

Major Funds Trim Their Positions

The growing caution is unequivocally reflected in recent portfolio disclosures. Prominent asset managers have initiated moves to reduce their exposure. Seed Wealth Management drastically cut its stake by 65.2 percent, while BSW Wealth Partners decreased its position by 15.6 percent.

These defensive maneuvers align directly with the stock's disappointing trajectory last year. In 2025, Amazon shares managed a gain of only approximately six percent, lagging far behind the S&P 500's 18 percent advance. Market observers interpret these sales as a signal that institutional investors currently perceive limited upside potential for the equity.

All Eyes on Cloud and Advertising Performance

Despite the present pressures, analysts now characterize the stock's valuation as "reasonable," noting that its historical premium has eroded. From a technical perspective, the shares are in a delicate consolidation phase near a key support level of $230.

Investor focus is now squarely on the quarterly results due in late January. The critical factor will be whether the cloud computing division, Amazon Web Services (AWS), can sustain its recently accelerated revenue growth rate of 20 percent. A convincing breakout from the current sideways trading pattern—and a subsequent return of institutional interest—is likely contingent upon Amazon delivering robust margins from both AWS and its advertising business.