Amazon sell-off pushes market cap below $1 trillion for first time since April 2020
Shares of the e-retailer plunged 5.9% on Tuesday, falling for a fifth straight day and closing at their lowest since April 2020. The sell-off has erased almost all of the stock’s pandemic surge.
Investors continued to punish the company for last week’s disappointing fourth-quarter forecast. Amazon said revenue during the holiday quarter would grow 2% to 8% over the year-ago period, far below analysts’ estimates. The cloud division, Amazon Web Services, also reported weaker-than-expected sales.
It’s the first time Amazon’s market cap has been below $1 trillion since April 2020. The stock has plunged 42% in 2021 and is on pace for its worst year since 2008, when it dropped 45%. The only other year that was worse was during the dot-com crash of 2000, when the company lost 80% of its value.
Like the rest of Big Tech, Amazon has struggled this year due to a slumping economy, soaring inflation and rising interest rates. On top of that, Amazon has been forced to scale back after expanding dramatically during the pandemic, now that consumers have returned to stores.
Amazon has been the second-worst performer in the Big Tech group this year, behind Facebook parent Meta, which has plummeted 72%. Meta told investors last week that revenue in the fourth quarter would likely decline for a third straight period.
— CNBC’s Annie Palmer contributed to this report.