For approximately 15 hours on Monday, Amazon (NASDAQ:AMZN) interrupted the internet for millions of consumers, showing just how dependent our modern world has become on providers of connectivity. Amazon Web Services, a cloud subsidiary that hosts much of the infrastructure online, faced a disruption stemming from a minor server update. The failure prevented apps from finding addresses for a core database on the East Coast called DynamoDB, but things cascaded quickly, bringing down many services across the globe.
The result: Outages were reported for popular apps like Snapchat (CHAT), Reddit (RDDT) and Zoom (ZM), as well as Uber (UBER) and Lyft (LYFT). Financial apps were also disrupted, ranging from brokerages such as Robinhood (HOOD) and Coinbase (COIN) to digital wallet Venmo (PYPL). Even conducting tasks like changing airline tickets or streaming was a challenge, given the breadth and reach of the interruptions.
Amazon’s (NASDAQ:AMZN) stock didn’t suffer a similar fate to CrowdStrike (CRWD) after its global IT outage in July 2024, when the cybersecurity firm slumped as much as 20% following a faulty security update. In fact, Amazon’s (AMZN) stock was up during the session on Monday as traders shrugged off the developments. In contrast, CrowdStrike’s stock took several months to recover following its debacle, and there wasn’t an immediate antidote to restore investor confidence.
What to make of it: People might be getting more used to these types of disruptions in our highly connected world, especially if they don’t occur often and are resolved quickly. However, it also makes a big difference in the type of disruption. AWS (AMZN) is a powerhouse that has achieved “too big to fail” status and technical glitches happen from time to time in the world of cloud computing. For CrowdStrike (CRWD), its failure was related to an update of its core product that is supposed to protect IT infrastructure —not result in a global “blue screen of death.” Safety was a paramount concern there, as well as lapses in the firm’s security protocol, which could have prompted companies to look elsewhere in the endpoint-protection market.