Amazon.com Inc (NASDAQ:AMZN) saw its market valuation drop below US$1 trillion for the first time in over two and a half years following a disappointing earnings season for big tech.
The e-commerce behemoth lowered its fourth-quarter guidance after missing revenue forecasts due to foreign exchange headwinds and US$2.5bn in international operating losses.
The company’s streaming service also faces trouble following a mixed reception to its one billion dollar Rings of Power series.
Shares crashed 16% after last Thursday’s earnings and have kept dropping every consecutive trading day since.
Yet Amazon’s valuation fought to stay in the trillion club alongside fellow tech giants Apple Inc (NASDAQ:NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:NASDAQ:MSFT).
That was until the closing bell overnight rang on a share price of US$96.79 and a market capitalisation of US$987.42bn, the lowest in over 31 months.
AMZN shares dip to 31-month lows, yet other tech competitors facing worse – Source: ycharts.com
Facebook (NASDAQ:META) owner Meta Platforms Inc (NASDAQ:FB) suffered a similar fate last year following its fateful rebrand.
Having briefly traded above US$1tn, Meta stock tumbled and kept tumbling. Today, Mark Zuckerberg's company is worth only a quarter of what it was pre-rebranding.
But their issues a vastly different: Meta is trying to convince the world that its multibillion-dollar gamble on metaverse technology will pay off.
Amazon is facing more conventional issues: An overpriced US dollar that’s causing forex headwinds, and global inflation trends that are causing consumers to tighten their belts.
Amazon is hardly in dire straits: Revenues still increased 25% year of year, and its advertising segment is managing to outpace both Google and Meta.
But until the macro headwinds change direction, there could be more short-term pain to come for big tech.