Amazon Loses $1 Trillion in Market Value — Why Are Investors Selling Their Stock?

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Amazon is the world’s first public company to lose a trillion dollars in market value, Bloomberg reported, amid a broader brutal tech selloff.

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Inflation and disappointing earnings triggered a historic selloff in the stock this year, according to Bloomberg.

On Nov. 9, the stock fell 4.3%, bringing the company’s market value to $879 billion compared with the record close of $1.88 trillion in July 2021. The stock is down 45% year-to-date.  However, on the morning of Nov. 10, the stock rebounded thanks to better-than-expected inflation data.

“The continuing impacts of broad-scale inflation, heightened fuel prices and rising energy costs have impacted our sales growth as consumers assess their purchasing power and organizations of all sizes evaluate their technology and advertising spend,” CFO Brian Olsavsky said in an earnings call according to a transcript of his remarks.

The company reported its third quarter earnings on Oct. 27 and following disappointed results, the stock tumbled 26% between Oct. 25 and Nov. 3 as investors grew concerned over the company’s consumer-reliant segments, the Motley Fool reported, adding that Amazon’s retail business has been hit especially hard in 2022 as rising costs have slowed consumer spending.

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In an Oct. 28 note, CFRA Research maintained its “Buy” opinion on the stock, but lowered its 12-month target to $152 from $170.

“High consumer inflation and weak sentiment are negatively impacting holiday e-commerce demand, and AMZN’s faster-growing and highly profitable cloud business is finally experiencing a slowdown as companies pull back on IT spend amid macro uncertainty,” CFRA analysts said in the note.

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Jeff Bezos, the fourth richest man with a net worth of $109 billion, according to the Bloomberg Billionaire Index, lost $83 billion so far this year.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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