Published - November 10, 2022 @ 4:00 PM (EET)
On Wednesday, Amazon (NASDAQ:AMZN) shares hit a new 52-week low, closing at $86.14 a share and making it the first-ever public US company to lose more than $1 trillion in market capitalization.
Down 48% so far in 2022, the e-commerce and cloud company's market value is now less than $880 billion from a record close of $1.88 trillion on July 2021.
While there was no company-specific about the tech company, fears of a recession after Meta Platforms (NASDAQ:META) said it was laying off 13% of its staff are likely the driver of a broader sell-off impacting the stock.
Secondly, a downturn in the cryptocurrency market continued after FTX, one of the biggest exchanges, was on the verge of collapse after Binance backed out of a rescue deal.
The top 5 technology companies by revenue in the US have seen roughly $4 trillion in market value evaporate this year, with Microsoft Corp. (NASDAQ:MSFT) closely behind Amazon after having lost $889 billion from a November 2021 peak.
WHY IT MATTERS
This year, the world's largest online retailer has spent most of its business efforts adjusting to a sharp slowdown in e-commerce growth as customers returned to pre-pandemic spending.
In October, Amazon projected the slowest revenue growth in the company's history for a holiday quarter, sending its market value below $ 1 trillion for the first time since the pandemic-fueled rally in tech stocks.
"At some point, even for the best companies with the best management, the multiple you pay for the stock matters," says stock research firm KCR.
NOW WHAT
Luckily, Amazon isn't the only one that's suffering. On Wednesday, US stocks settled sharply lower following the midterm elections.
The Walt Disney Company (NYSE:DIS) recorded its biggest single-day decline since 2001, with its shares dipping 13% after reporting weaker-than-expected fourth-quarter results.
Elsewhere, all the major sectors on the S&P 500 closed on a negative note, with energy and consumer discretionary stocks recording the biggest plunge on Wednesday.
