Amazon.com Inc. The market cap briefly dipped below $1 trillion after its disappointing earnings report and outlook sent investors out for an exit.
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.”
With US Treasury rates rising and the highest inflation in decades this year, the ranks of companies with valuations of more than $1 trillion have been particularly heavy 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. .
This story has been published without modification in text from a wire agency feed.
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