On Wednesday, Amazon’s stock fell 4.3%, reducing its market worth from a record close of $1.88 trillion in July 2021 to roughly $879 billion.
Amazon.com Inc. is the first publicly traded firm in the history of the world to have seen its market value fall by a trillion dollars due to a confluence of factors this year, including tightening monetary policies, rising inflation, and disappointing earnings reports.
The e-commerce and cloud company’s shares dropped 4.3% on Wednesday, reducing its market worth from a record close of $1.88 trillion in July 2021 to roughly $879 billion. Amazon and Microsoft Corp. were competing head-to-head to surpass the undesirable milestone, with Microsoft Corp. coming in second place after losing $889 billion since its November 2021 peak.
Fears of a recession have further dimmed the mood in the sector, which has already been hit hard by the year-long punishment of technology and growth companies. This year, the market value of the top five US technology corporations by revenue has decreased by around $4 trillion.
How are Amazon’s shares performing in 2022?
Many consumers turned to online shopping due to the COVID-19 outbreak, and online merchants like Amazon reported a sharp increase in traffic and sales. Revenues decreased when the pandemic subsided, and the surge slowed, and the surge.
Interest rates have increased due to the U.S. Federal Reserve’s efforts to rein in spiraling inflation, which has caused sales to slow down further. Investors were disappointed by Amazon’s third-quarter profits last month. Still, the company’s forecast of less than 8% year-over-year growth for the last quarter of 2022 has further eroded market confidence.
While this might not sound awful for other businesses, Gizmodo stated that because of Amazon’s relentless growth machine, a growth rate of less than 8% poses an issue for investors.
Amazon’s stock price has dropped by 50% over the past six months, and as of Wednesday, the business was valued at $879 billion as opposed to $1.8 trillion in June 2021.
As consumers cut back on their purchasing in the face of economic uncertainty, Amazon predicted the slowest sales increase for a Christmas quarter in the company’s history last month. This resulted in its market worth falling below $1 trillion for the first time