The stock price of Amazon is down by 31.19%, underperforming the Nasdaq-100 over the last 12 months, which is down by 16.27% over the same period. The fortunes of almost all tech giants plummeted in 2022 and the eCommerce giant Amazon was among the hardest hit. According to TradingPlatforms.com data, Amazon’s stock value fell 45% year on year in 2022, wiping $670 billion off its market cap.
When Bezos stepped out, Amazon’s market valuation was almost at its highest point, hovering around $1.7 trillion. Since Andy Jassy assumed leadership, AMZN’s market value has fallen along with the rest of the market. Its market valuation currently stands at $955 billion, which is less than half of its peak value at the time of the transfer.
The reason why the tech-heavy Nasdaq 100 is falling or why the share price of technology stocks is falling is linked to the valuations of stocks. As the underlying parameters change, so do the valuations and Amazon is an ideal illustration of that.
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The growth potential of IT companies is being hampered by inflation, high-interest rates, and macroeconomic concerns. Tech companies are frequently valued largely on expected future earnings rather than on present performance. As the future of Amazon’s business looks bleak, the price of the stock is falling.
The e-commerce behemoth is battling rapid expansion, rising expenses, and a decline in consumer spending while attempting to control both. The company’s stock price fell throughout 2022 as a result of underwhelming financial performance, erasing more than $500 billion from its market value in only one year.
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In January of last year, Amazon’s stock worth was $1.65 trillion, according to data from YCharts. This amount dropped to $1.41 trillion in March then quickly rose to $1.61 trillion in April before dropping once more to just over $1 trillion in July. But a decline was just getting started.
According to statistics, Amazon’s stock worth increased to $1.45 trillion in August before falling to $878 billion three months later. The internet behemoth had a market valuation of over $902 billion at the conclusion of the year. Despite last week’s increase in the total value of Amazon shares to $981 billion, this still represents a staggering 45% decline from the previous year.
Despite the fact that some of the biggest names in the IT sector, such as Apple and Microsoft, are still performing well, investors have stopped buying tech stocks because they are no longer confident in their ability to continue growing at the rate that investors expect. According to statistics, Apple, Microsoft, and Alphabet all saw stock value declines that were significantly less than those experienced by Amazon or Meta. Only Meta Platforms experienced a worse stock price decline among the Big Five, with Amazon’s 45% YoY market value decline ranking second.
YCharts statistics show that Meta’s stock value decreased by about 60% year over year in 2022, going from $872 billion to $355 billion.