Shares of Amazon tanked to levels unseen in more than two years in after-hours trading after the ecommerce juggernaut reported revenue on Thursday that fell short of analyst expectations—making it the latest casualty of an earnings season that has tanked the value of some of technology’s biggest players, as fears of an impending recession cut into growth expectations.
Amazon reported revenue of $127.1 billion in the third quarter, slightly less than the $127.5 billion analysts were forecasting, while net income fell to $2.9 billion, or $0.28 per share, down about 9% from one year earlier.
Immediately after the announcement, shares plunged more than 18% to less than $90 in after-hours trading, pushing the stock to its lowest level since early 2020 and down nearly 50% for the year—far worse than the tech-heavy Nasdaq’s 32% decline.
In a statement, Amazon CEO Andy Jassy acknowledged the “uncertain economic times” have forced the company to cut costs across its fulfillment network, and also predicted the company will make about $144 billion in sales this quarter; analysts were expecting the company to pull in $155 billion.
Also driving bearishness, the company reported sales of its fast-growing Amazon Web Services segment grew 28% in the quarter—worse than expectations calling for growth of more than 30%.
“AWS is the heart of the company, and the weakness there will raise a giant red flag,” analyst Adam Crisafulli of Vital Knowledge Media said in emailed comments, pointing out the segment has been driving the bulk of Amazon’s stock gains during the pandemic.
$134.8 billion. That’s how much Amazon founder Jeff Bezos was worth when the market closed on Thursday. At one point worth more than $200 billion, Bezos’ fortune has cratered alongside shares of Amazon, which peaked at more than $188 last year but have since fallen 53%.
Global economies have started to slow down as central banks including the Federal Reserve work to combat inflation by tempering consumer demand with higher interest rates. Recent earnings reports have started to reflect the pressures—and it’s been particularly bad for technology giants. On Tuesday, Alphabet stock plunged after the Google parent missed third-quarter sales and profit expectations. Then on Wednesday, Meta posted similarly disappointing results—pushing the social media firm’s shares down nearly 25%.