Amazon’s share price tumbled after it warned about holiday shopping.
Gary Cameron/Reuters
Amazon’s stock price dropped 14% in Friday’s premarket as it warned of soft sales in the key holiday season.
The online retailer’s market cap is on course to fall below $1 trillion if those losses hold at the open.
The world’s biggest e-commerce company warned of an inflation-driven drop in spending and currency headwinds.
Amazon shares dropped almost 14% in premarket trading Friday after a poorly received third-quarter earnings report, signaling a risk the stock could lose hold of its trillion-dollar market value.
The online retailer missed revenue targets and issued a gloomy sales forecast for the key holiday shopping season in its third-quarter earnings report late Thursday.
Amazon shares were down 13.6% at $95.89 at last check Friday, after cratering as much as 21% to $87.59 in after-hours trading.
If those losses hold when the market opens, that would wipe over $150 billion off Amazon’s $1.13 trillion market cap as of Thursday’s close. The tech giant would lose its trillion-dollar company status.
Amazon posted third-quarter revenue of $127.10 billion, compared with analysts’ expectations for $127.46 billion projection, according to Refinitiv.
The world’s biggest e-commerce company said it expects a slowdown in sales growth in the last quarter of the year, warning about a fallback in spending by consumers and businesses worried about inflation.
Amazon forecast revenue of between $140 billion and $148 billion in that quarter, well below the Wall Street consensus for $155.15 billion in Refinitiv data. Its projected sales growth of 2% to 8% year-on-year is well below the 9% and 38% seen in the fourth quarters of 2021 and 2020.
The company’s finance chief Brian Olsavsky said sales were moderating across several of its businesses, speaking on a call with reporters. He cited increasing headwinds from foreign currency exchange, as the dollar’s strength dominates, and said those effects will persist into the fourth quarter.
Amazon is the latest Big Tech to see its stock price plunge in a brutal third-quarter earnings season that has revealed pressure from falling digital ad sales, a consumer spending slowdown and the impact of the strong dollar. Google parent Alphabet and Facebook parent Meta Platforms both saw steep falls in stock price.