Amazon Becomes First Company to Lose $1 Trillion in Market Value

The online retail giant is the first company to have shed that much market value. It hit a 52-week low on Wednesday in a painful reminder to investors that valuation multiples change dramatically in bear markets.

• Amazon fell below $900 billion at the close on Wednesday, having topped out at roughly $1.9 trillion back in July 2021. It has since been dragged down by weak earnings and a drop in technology-stock valuations.
• Amazon’s fall outstrips that of Microsoft, which has lost roughly $950 billion from peak to trough.
• Amazon CEO Andy Jassy took over in July 2021 when the stock traded at more than 65 times trailing earnings. Amazon now trades for less than 50 times estimated 2023 earnings.

What’s Next:Amazon is preparing for a potentially tricky holiday season, having highlighted an unusually large range of possible operating income for the fourth quarter of anywhere between zero and $4 billion. With e-commerce spending likely to be restrained in the short term, the pressure is on the cloud-computing unit, which has slowed recently.

—Adam Clark

Source: https://www.barrons.com

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