Amazon shares fell around 4.3% on Wednesday pushing the company’s market value to about $870 billion getting closer to $1.88 trillion during the month of July in the year 2021
Amazon became one of the first companies in the world to lose a trillion dollars in market value. Jeff Bezos’s Everything Store lost $1trillion dollars as the economy tightens and policy measures constrict in a market where prices are soaring along with disappointing earnings updates causing a reduction in the value of the stocks this year. Amazon’s third-quarter revenues disappointed its investors last month as it failed to meet expectations. The company also announces a possible weaker fourth quarter with an over-the-year growth of 2-8%.
Shares of the company fell around 4.3% on Wednesday pushing the company’s market value to about $870 billion getting closer to $1.88 trillion during the month of July in the year 2021. The present numbers on the market value of Amazon are a result of the worsening economy and massive selling of stocks.
Amazon and Microsoft were nearly close to each other in losing their stock value when Microsoft, the software manufacturing company which overtook Apple for a brief period of time as the most valuable company last year, became close behind after losing around $880 billion dollars from November 2021 peak. Combining both companies’ decline captures less growth in the tech world generally in terms of numbers.
Amazon recently predicted having the slowest holiday-quarter growth in the company’s history and stated that the company might not bring in large profits and that the season would be smaller than expected. Amazon also saw the plummeting of shares in the premarket trading after the prediction.
In addition to these, Amazon’s Web Services and the cloud computing division saw no particular growth, compared to the company’s usual revenue earnings as many countries across the globe eased their Covid restrictions. Owing to the slowdown, Amazon had to close up many experimental projects and closed up products and services in areas where the business isn’t going in the company’s favor and decided to invest in areas where the company could have more returns.
However, the declines in numbers are not just pertaining to Amazon and Microsoft as many top US tech giants have reported losses with a combined reduction of around $4 trillion in value this year which is more than the Gross Domestic Product of many countries.
The firm has spent this year adapting to the sharp slowdown in the e-commerce market as consumers resumed their normal life by choosing pre-pandemic shopping trends. The share of the firm has fallen nearly 20% amidst a sharp reduction in sales and a slowing economy in general. Andy Jassy, Chief Executive Officer of Amazon, stated that there are a lot of changes happening in the macroeconomic environment and the firm will try to balance the investments to be more streamlined without compromising on the long-term goals of the company.
The American multinational company has so far managed to avoid the large layoffs happening in tech giants like Twitter and Meta. However, the company earlier this month began a hiring freeze to cover the corporate employees as an uncertain economic outlook and mass hiring have caused a considerable slowdown for the company.
Apple, a few years ago became the first company in the world to reach the trillion mark and was joined by other companies including Amazon, Aramco, Microsoft, and Meta along the way to reach the inexplicable goal. The losses the firm has incurred are also the result of the global economic slowdown as many top firms in the world are facing a financial crisis.