Following weak growth projections and concerns about a fall in revenue, shares of e-commerce giant Amazon tumbled on Tuesday by 5.5 percent. With the fall of stock value on Tuesday, the market capitalization of Amazon has gone below 1 trillion dollars. The market value of the American multinational conglomerate is currently standing at 987 billion dollars.
Amazon which was founded by Jeff Bezos in 1994 is one of the 5 GAMMA companies which reins the information technology industry in the United States of America.
According to Dow Jones Market Data, the market capitalization of Amazon is going below 1 trillion dollars for the first time since 2020. The last time Amazon bowed out of the trillion-dollar group was on April 6, 2020, when lockdowns induced by the Covid-19 pandemic pushed down the share value of the e-commerce giant.
Market data also suggests that the stock value of Amazon has been decreasing consecutively for the past five trading sessions signaling low confidence among investors and traders. In the last five days, Amazon stocks tumbled by nearly 19.74 percent. It is the worst five-day loss for Amazon since November 20, 2008, when the company’s value tumbled by more than 22 percent.
The e-commerce giant has come under recent pressure after the company’s latest earnings report highlighted a slowdown in AWS cloud-computing revenue growth. Additionally, Amazon disappointed with the forecast it offered for the holiday quarter.
Statistics and growth prospects in the retail sector also do not look good for the e-commerce firm. There are also concerns within the investor community that the fourth quarter performance of Amazon will be worse than what the company expects it to be.
Strong inflationary pressure in major economies is forcing central banks to hike interest rates above favorable levels. This might push the global economy into a recession which will severely impact the revenue prospects of E-commerce companies.
There are reports that customers in European countries have largely reduced spending on online retail platforms as financial conditions are getting worse in those countries day by day. High inflation rates and the aggressive interest rate hike policy followed by European Central Bank have made life tougher for European citizens. The situation is not much different in other parts of the world also.
Amidst all this, the parent company of Facebook, Meta Platforms Inc witnessed its stock values going up unexpectedly on Tuesday as a commissioner from FCC asked US federal government to ban the Chinese social media app, TikTok.