Dive Brief:

• Amazon was one of the most favored stocks of 2015 that took a beating Monday as anxiety over China’s economy and instability in the Middle East hit Wall Street.

• The e-retailer giant's stock fell about 6% and was downgraded by some analysts who questioned whether its investments in growth could deliver similar results to last year.

• Netflix, Facebook, and others were also downgraded and their stocks suffered as a result. Some stocks that fell out of favor last year, including Lululemon and Macy’s, were up despite the overall tumble.

​Dive Insight:

A volatile day like Monday is hardly an ideal basis for long-term predictions. Amazon investors have shown a history of patience for the long term vision espoused by Jeff Bezos, but Monday’s tumble could be a reality check — even as Amazon becomes more profitable, it will also continue to be a company that pays for constant innovation.

Amazon stock fell after being hit by a downgrade by analysts at Monness Crespi Hardt on a bad day on Wall Street in general. While the analysts believe Amazon has strong competitive advantages over other companies, Amazon's growth investments “may yield less degrees of upside than delivered throughout 2015," the analysts said in a note explaining the downgrade.

Amazon faces high costs on fulfillment and logistics, even while it boasts the successes of Fulfillment by Amazon. Amazon revealed on Tuesday that its “Fulfillment by Amazon” unit has grown, delivering more than 1 billion items globally last year. Some 23 million items were delivered for third-party merchants worldwide on Cyber Monday alone, the company said, and more than 80% of Amazon’s customers worldwide ordered something from a third-party merchant during the holiday season.

While the company is said to be looking into becoming its own shipper, Amazon enjoys a stellar reputation for customer service, and it may not be able to cut costs in delivery and shipping without sacrificing quality — something that has already become a challenge as it experiments with taking on the last mile of delivery. 

Despite Monday’s fall, the shadow of Amazon is likely to loom large over the retail landscape in 2016.

“They’ve often been the first to introduce things like free shipping, they were the first membership-based online retailer, the first to have same day delivery,” Profitero VP of strategy and insights Keith Anderson told Retail Dive. “I feel pretty comfortable to say, if you read between the tea leaves with their recent logistical moves like buying up truck fleets, it points to their continued commitment to being 18 to 24 months ahead of everyone. That includes not just having the convenience of fulfillment centers but, increasingly, last-mile logistics.”