“Clearly a lot is happening in the macroeconomic environment,” Amazon CEO Andy Jassy said last month. “We will balance our investments to be more streamlined without jeopardizing our key long-term strategic investments.”
Amazon announced on Oct. 27 that it expects fourth-quarter revenue of between $140 billion and $148 billion, representing 2% to 8% year-over-year growth. This was below analysts’ expectations of $155 billion.
This forecast was particularly disappointing for investors as it focused on the year-end period, a time when consumers typically spend much more than at other times.
So they started liquidating Amazon stock, which has lost 46.4% of its value since January. This translates into a drop in market value of nearly $800 billion. Amazon now has a market cap of just over $911 billion. It marks the first time since April 2020 that the e-commerce giant’s market cap has closed outside the $1 trillion club.
If stock performance continues like this, 2022 would be the second-worst year in Amazon history. Unsurprisingly, the worst year has been the bursting of the dot.com bubble in 2000. At that time, Amazon stock plunged 80%. In 2008, during the financial crisis, Amazon shares fell by 45%.
Will Google be next?
Amazon first entered the $1 trillion club in September 2018. At the time, this club had only one member: Apple.
Investors at the time welcomed the diversified portfolio of Seattle-based Washington group. The company had ambitions in the food industry with the acquisition of Whole Foods. It started with advertising to compete with Google and Facebook. It strengthened its hardware and logistics business with investments in Rivian and other initiatives such as last-mile delivery. The cloud company, Amazon Web Services (AWS), got off the ground. Don’t forget entertainment with Amazon Prime Video.
Amazon isn’t the only member of big tech to suffer this year. Metaplatforms
(Facebook’s parent company, Instagram and WhatsApp, saw its shares fall by 74%, translating into a drop in market value of nearly $700 billion. META)
(, the parent company of Google and Youtube, is also under pressure from investors as companies worldwide cut advertising budgets. The company has moved closer to the $1 trillion club exit in recent days. Its market value is currently $1.07 trillion. Shares of Alphabet are down 42.3% since January, translating into a loss of more than $700 billion in market value. GOOGL)
In addition to Alphabet, the very select club has only three members. These are Apple with a market cap of $2.27 trillion, Saudi oil giant Saudi Aramco with a market cap of $2.0 trillion, and software giant Microsoft.
( with a market cap of $1.6 trillion. MSFT)