Most people's portfolios are in rough shape since the beginning of 2022. But Amazon was the first company to ever wipe $1 trillion from its valuation, setting the record yesterday.
Amazon's market cap reached a record $1.88 trillion in July 2021, but it's worth only $878 billion as of yesterday.
Amazon's Q3 earnings forecasts were not met. However, Amazon's stock fell even further after it warned customers and businesses that they are cutting back on spending.
Amazon was the leader of the pandemic ecommerce boom. In the year after the pandemic, Amazon saw its profits triple and its stock price double. Amazon experienced double-digit revenue growth in 2020 and 2021… but it couldn't maintain that rate forever.
The company expects to see 2-8% growth in Q4. That growth is more than enough for most companies, especially in this year. Amazon investors, however, are used to larger growth and may need to adjust their expectations.
Takeaway: This has been a difficult year for tech stocks such as Amazon. This year, the top five most valuable American technology companies lost $4 trillion in value. This is more than the entire combined GDPs of Argentina, Switzerland, and Turkey. Amazon's woes could be especially alarming because of its reports that business and consumer spending is slowing. This could indicate more problems ahead for the economy as a whole.
