The stock fell as much as 12% on Friday after the e-commerce giant forecast the slowest holiday-quarter growth in the company's history
Amazon.com Inc. Its market cap fell below $1 trillion for a while, with its disappointing earnings report and outlook sending investors freaking out.
The stock fell 12% on Friday after the e-commerce giant forecast the slowest holiday-quarter growth in the company's history, while sales in its vital web services business were not forecasted. Amazon's market cap fell to nearly $995 billion before the stock rebounded and closed down 6.8%.
The stock had lost up to 21% after Thursday's trading. Amazon is joining a long list of US companies to see their market values plummet in this year's bear market.
"This (stock selloff) looks like an overreaction to us after a tough earnings week for the group," Piper Sandler analyst Thomas Champion wrote in a note. Although the macro environment remains challenging, especially in Europe, the company's forecast "looks conservative."
The ranks of companies with a valuation of more than $1 trillion have thinned this year with US Treasury rates rising and the highest inflation in decades, especially taking a toll on stocks of technology companies. The Nasdaq 100 index has fallen 29% from last year's peak amid rising risks to economic growth from China's supply chain snarls to the war in Ukraine and the Covid-19 lockdown.
The market value of Tesla Inc., an electric-car maker once valued at more than $1.2 trillion, has fallen to nearly $720 billion. Facebook parent Meta Platforms Inc. The U.S. market cap fell more than 75% from last year's peak of $1.08 trillion, making it out of the ranks of the world's 20 largest companies. Even Apple Inc., whose massive cash flow and fortified balance sheet have made it a favorite destination for risk-averse investors, could briefly become the world's largest asset to oil giant Saudi Aramco. Lost its title as a valuable company.
The Covid-19 pandemic helped supercharge Amazon's businesses and catapulted its value to a peak of $1.88 trillion nearly a year ago. Now with growth slowing and an uncertain macroeconomic backdrop, its shares have fallen about 38% this year. Jeff Bezos, once the world's richest man, was at number three on Thursday.
"Amazon may trade range-bound until macro storm clearing and evidence of a lasting improvement in profitability," said Brent Thiel, an analyst at Jefferies, who has a buy rating on the stock and a price target of $135. .
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