Since going public on Sept. 19, China's Alibaba is up 72 percent from its IPO price. During the period, Amazon's shares are down 9 percent—and have lost 24 percent this year.
What's more, Alibaba may be getting an extra boost this week. It is expecting to break its "Single's Day" sales record. In turn, that could leave Amazon brokenhearted.
Falling on Nov. 11, Single's Day (meant to celebrate the unattached) has become for China what Cyber Monday is for the U.S.—an online shopping bonanza. The only difference is that Single's Day is even bigger—way bigger.
This year, Alibaba is expected to surpass a record $8 billion in online orders just on Single's Day alone. That's more than three times the $2.6 billion online companies are expected to book on Cyber Mondaythis year. With numbers like that, it's little wonder why investors are flocking to Alibaba and ditching Amazon, which despite enormous sales growth has struggled to turn a profit. Alibaba's market cap is $286 billion compared with Amazon's market cap of $140 billion.
"Alibaba is firing on all cylinders, but what's happening with Amazon is entirely Amazon's doing," said CNBC contributor Gina Sanchez, founder of Chantico Global. "We've seen Amazon continue to grow revenue by making a lot of investments, and those have paid off. However, they can't seem to generate any profits."
Over the last 12 reported months, Amazon has shown a loss of $215 million. The company also said it expects fourth-quarter revenues to grow at a slower pace, to a range between $27.3 billion and $30.3 billion. Last year, Amazon had fourth-quarter revenues of $25.6 billion, so that range means the company isn't foreseeing the kind of growth it had in the past.
"That truly threatens the stock because they are so elevated and they are so expensive here," warned Sanchez, who suggests Alibaba may have some role in biting into Amazon's growth. "If you can't hold it as a growth stock, it has got to generate profits and it has got to do it now."
The technicals are also looking bad for Amazon, according to Craig Johnson, senior technical research analyst at Piper Jaffray. "As I look at the chart on Amazon, there is some significant damage that has been done," he said. "We violated the uptrend support line that has been in place for multiple years. We have now started to make a series of lower highs."
Johnson, who is also president of the Market Technicians Association, is keeping an eye on the $275 per share level as support for Amazon. "If we don't hold that, your next support is about $248 and then after that, about $225," he said. "The chart is telling us that investors are concerned that something is perhaps wrong. When you get these big uptrend breaks, there is a clear change of psychology that has occurred, and I think the chart is telling us that."
Amazon is currently trading around $303 per share.