Virendra Pandit
New Delhi: That technology-enabled giant companies have lost money heavily this year is known. In India, for example, education technology companies are bleeding; in the US, social media behemoths are sliding swiftly. But who had imagined a technology-based e-commerce and cloud company like Amazon would also follow the same route?
But it did.
Some 15 months ago, Amazon stood pretty at USD 1.88 trillion; now it stands at a mere USD 879 billion.
Amazon Inc. has become the world’s first company to lose USD 1 trillion in market value because of a combination of reasons like rising inflation worldwide, central banks tightening monetary policies globally, and dwindled earnings updates—which all triggered an unprecedented selloff in the value of stocks this year—the media reported on Thursday.
On Wednesday, shares in the e-commerce and cloud company fell 4.3 percent, pushing Amazon’s market value from a record close of USD 1.88 trillion in July 2021 to about USD 879 billion now.
But the e-commerce giant was not alone in this steep decline. Microsoft Corp. also was neck-and-neck in the race to breach the pessimistic milestone. From a peak of November 2021, Microsoft also lost USD 889 billion.
Post-pandemic, while other sectors have tried to recover their losses in the Covid-19 lockdowns, technology and growth stocks lost the gains they made during the pandemic months of 2020 and 2021. Throughout 2022, technology and growth stocks suffered heavily as the world limped back to pre-2020 levels.
After the Russian invasion of Ukraine in February 2022, the world dreaded the fuel, food, and financial crisis as fears of a global recession dampened sentiments of different sectors, particularly technology. The top five US technology firms by revenue—Apple, Microsoft, Alphabet (Google), Amazon, and Tesla—collectively lose nearly USD 4 trillion in market value in 2022.
Amazon, the world’s largest online retailer, has spent 2022 trying to adjust to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits of outdoor shopping. Its share price declined nearly 50 percent amid slowing sales, soaring costs, and a spurt in interest rates.
Since January 2022, Amazon’s co-founder Jeff Bezos has seen his fortune dwindle by about USD 83 billion to USD 109 billion, the media said.
In October, it projected the slowest revenue growth for a holiday quarter in the company’s history as worried shoppers reduced their spending in the face of economic uncertainty amid fears of a global recession. That sent its market value tumbling below USD 1 trillion for the first time since the pandemic-fueled rally in technology stocks after early 2020.