Amazon loses $200 billion on record-breaking tech spree

Surprisingly, Amazon’s digital infrastructure business, Amazon Web Services, also fell short of market expectations, generating $20.5 billion in revenue.

Neil Campling of Mirabaud Securities said: “Retail and consumer weakness is not a new theme or a shock. Neither are inflation or logistical challenges. But the speed of the cloud slowdown will surprise many investors.”

Andy Jassy, ​​CEO of Amazon, said: “There is clearly a lot going on in the macroeconomic environment and we will balance our investments to be more streamlined without compromising our key long-term strategic bets.”

The plunge in Amazon’s stock price also wiped billions from the net worth of its founder, Jeff Bezos. Before tonight’s share price plunge, Mr Bezos was worth $140bn, according to the Bloomberg Billionaires Index, most of which is made up of Amazon shares.

The massive drop in Amazon’s market value is one of the biggest one-day sales of all time. Meta’s market value fell by more than $230 billion overnight after the disappointing February results.

Meanwhile, Apple, the world’s most valuable company worth more than $2 trillion, beat market expectations and posted an 8.1 percent rise in revenue to $90.1 billion, a September record.

Apple released its iPhone 14 in September, which despite lukewarm critical reception helped boost iPhone sales to $42.6 billion, up 9.7 percent from a year earlier, but slightly below market expectations. The stock still fell 3 percent, or $69 billion.

Reports from Apple’s supply chain have suggested in recent weeks that it has cut production of some iPhone models due to lower-than-expected demand for the phones.

Apple is increasingly relying on increased revenue from its services division, which consists of fees for Apple Music, TV, iCloud and the App Store. This week, Apple hit consumers with inflation-beating price hikes for its Apple Music and Apple TV products.

Apple Music has increased its monthly price from £9.99 to £10.99, more than rival Spotify. Apple TV+ has gone from £4.99 to £6.99. It reported service revenue of $19.1 billion, up 4 percent.

Amazon, meanwhile, has cut back on hiring in its corporate teams and slowed new warehouse openings under new CEO Jassy, ​​who took over from founder Jeff Bezos last year.

Amazon has also cut its warehouse and logistics operations this year, cutting 100,000 jobs over the summer from last year as it braces for weaker sales.

It comes in the midst of a global rout fueled by tech stocks sad reports about Meta’s earningsthe parent company of Instagram and Facebook, and Google so far this week.

After soaring during the coronavirus pandemic, when consumers were stuck at home and forced to rely more and more on digital technology, tech stocks have fallen so much this year.

A market slowdown tends to hit tech stocks harder, as they are typically valued for their long-term growth.

But a combination of inflation, rising costs, a collapsing digital advertising market and poor earnings have sapped the optimism of tech investors.

Mark Zuckerberg, Facebook’s chief executive, lost $10 billion of his personal fortune on Thursday as Meta’s shares fell 25 percent after it reported rising costs on Wednesday night due to falling digital advertising sales.

Mr. Zuckerberg has bet the company’s future on so-called Metaverse technologies based on virtual reality. But so far, billions of dollars in investment have not translated into revenue.