The US stock market lost a startling $200 billion during Thursday’s extended trading as a result of Amazon’s underwhelming forecast. As the latest in a string of dismal quarterly predictions from Big Tech businesses, the company had forecast a fall in revenue growth for the holiday season.
For the third quarter that concluded on September 30, Amazon reported net sales of $127.1 billion based on IBES data from Refinitiv. The expert predictions of $127.46 billion were slightly lower than this. The biggest online retailer in the world forecasted net sales of between $140 billion and $148 billion for the holiday season, down from an earlier prediction of roughly $155.15 billion. After the bell, shares of Amazon dropped 17%, wiping off $190 billion in market value.
Despite the fact that Apple’s revenue and profit above Wall Street projections, iPhone sales fell short of targets. The market value of the company decreased by $30 billion as a result of its shares’ 1% reduction. Although actual sales came in at $42.6 billion, Refinitiv IBES’ projection of $43.21 billion for phone sales during the company’s fiscal fourth quarter was off.
People are worried about the status of the global economy as central banks raise interest rates to fight inflation as a result of the poor quarterly results from some of Wall Street’s biggest businesses. In New Vernon, New Jersey, Rick Meckler, a partner at Cherry Lane Investments, told Reuters that ‘Big Tech businesses are not invincible to slowdowns in the economy, particularly if they are consumer focused’.
According to Meckler, the Fed’s expected slowdown is ‘eating away at some of their consumer-facing businesses, and given their high multiples, it is causing big contractions in their stock prices’. Nasdaq futures’ three percent decrease indicated that Wall Street will open Friday with a significant decline. Following the release of poor quarterly results on Tuesday, Alphabet, the firm that owns Google, and Microsoft both seen losses grow by about 1% apiece.
Meta Platforms Inc. shares also dropped by 25% as a result of the company’s costly bets on the metaverse and investor anxiety over the impact of growing inflation on ad expenditure. Meta had a market worth of approximately $260 billion. The company is currently valued around 20th on Wall Street. If the after-hours slide continues into Friday’s trading session, it will have been Amazon’s largest single-day loss since 2006. Pinterest climbed 13%, and Intel increased 6% after the social media site reported higher-than-expected quarterly sales.