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Tuesday, April 16, 2024

Amazon Rout Sets Up Retreat Below $1 Trillion Market Value

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(Bloomberg) — Amazon.com Inc.’s market value is set to fall below $1 trillion after its disappointing earnings report late Thursday sent investors running for the exit.

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The stock fell as much as 21% to $87.59 in extended trading after the e-commerce giant projected fourth-quarter revenue that trailed the average analyst estimate, while sales at its important web services business missed. Amazon shares later pared a portion of the losses.

If Amazon retests that postmarket low in Friday trading, it would equate to a wipeout of roughly $240 billion — the biggest drop for the stock since 2006. At the close Thursday, Amazon had a market capitalization of $1.13 trillion. It would be the latest US company to see its market value crumble this year.

Read more: Amazon Plunges After Projecting Lackluster Holiday Sales

The ranks of companies with valuations in excess of $1 trillion have thinned this year with soaring U.S. Treasury rates and the highest inflation in decades weighing particularly heavily on the stocks of technology companies. The Nasdaq 100 Index has fallen more than 30% from last year’s peak amid rising risks to economic growth from supply chain snarls and Covid-19 lockdowns in China to the war in Ukraine.

Electric-car maker Tesla Inc., once worth more than $1.2 trillion, has seen its market value tumble to about $710 billion. Facebook parent Meta Platforms Inc. market value plunged by more than 75% from its $1.08 trillion peak last year, forcing it out from the ranks of the world’s 20 largest companies. Even Apple Inc., whose massive cash flows and fortress balance sheet have made it a favorite destination for risk averse investors, briefly lost its title as the most valuable company in the world to oil giant Saudi Aramco.

The Covid-19 pandemic had helped supercharge Amazon’s businesses and propelled its value to a $1.88 trillion peak about a year ago. With growth now slowing and an uncertain macroeconomic backdrop, its shares had fallen about 33% this year through Thursday’s close. Jeff Bezos, once the richest person in the world, was ranked No. 3 as of Thursday.

Bezos on Brink of $23 Billion Wealth Drop, Among Worst On Record

–With assistance from Matt Turner.

(Updates shares in second paragraph. A previous version corrected Amazon’s market value based on Thursday’s closing price.)

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