Amazon, one of the first companies to join the prestigious $1 trillion dollar valuation club, just passed another, admittedly less desirable milestone. This week, Jeff Bezos’ Everything Store became the first publicly traded company to lose $1 tillion in market valuation.
The mind boggling figures, first noted by Bloomberg, are the results of a worsening economy, repeatedly dour earnings reports, and massive stock selloffs. Amazon, valued at $1.882 trillion on June 21, on Thursday reported a comparatively measly $878 billion valuation. Microsoft, which briefly surpassed Apple as the world’s most valuable company last year, wasn’t far behind, with market valuation losses hovering around $900 billion. Combined, the two companies’ declines capture the effect of a lousy year most in tech would like to soon forget.
Those declines aren’t just limited to Amazon and Microsoft. The top five most valuable U.S. tech companies reportedly lost a combined $4 trillion in value this year. To put that in perspective, that’s more than the combined GDPs of Turkey, Argentina, and Switzerland.
Amazon, in particular, disappointed investors last month with third quarter revenues that failed to meet expectations. Worse still, the company said it’s expecting to post fourth quarter year-over-year growth of just 2-8%. That’s fine for a normal company, but there’s nothing normal about Amazon which was, until now, a relentless growth machine. Like many other companies Amazon’s also had to contend with declining e-commerce shopping as consumers, less concerned with covid-19, begin to trickle back into retail stores.
“There is obviously a lot happening in the macroeconomic environment,” CEO Andy Jassy said following the third quarter earnings report. “And we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.” On the plus side, Amazon’s so far managed to avoid the eye popping layoffs that have impacted so many of its tech industry compatriots. That’s not to say there aren’t reasons for concern. Earlier this month, the company moved to expand an earlier hiring freeze to cover all of its corporate employees. In a memo, Amazon Senior Vice President of People Experience and Technology Beth Galetti cited an uncertain economic outlook and a rise in hiring in recent years as the main drivers behind the slowdown. Zooming out, the record valuation losses arguably say just as much about the peculiarities of the modern global economy as it does about one single company. Just four years ago, Apple became the first company to achieve the $1 trillion valuation mark. Apple somehow managed to briefly triple that valuation in the years since and around a half a dozen other companies, including Amazon, Microsoft, Meta, and Saudi Aramco, all managed to surpass the once unfathomable figure. Now, in 2022, rather than write stories on companies achieving that trillion dollar mark, the more meaningful story centers around those who can lose that same amount and still maintain untoward levels of wealth.