Oh, how the mighty have fallen. That’s how it must feel for those invested in online giant Amazon, whose shares are now down about 25% from their all-time high.
Is Amazon Moving Into Too Many Areas? I Fortune
On Sept. 4, Amazon became the second U.S. stock after Apple to reach a market cap of $1 trillion. The stock closed at $2,039.51 a share that day, briefly giving it a market cap of $1.02 trillion. The stock’s value dipped below $1 trillion the next day, but for a few days at the end of September, it again earned the gilded honor as a member of the trillion-dollar club.
Amazon reported earnings last week that showed revenue below Wall Street estimates. Amazon also warned that revenue growth in the current quarter—which includes the busy holiday season—would be as low as 10% and as high as 20%. Analysts had been forecasting revenue growth of 22% in the quarter.
While the loss in Amazon’s market cap is surely not going unnoticed in its Seattle headquarters, it’s unlikely to prompt CEO Jeff Bezos to alter his plans for the company’s future growth.
The company blew away its operating income forecast, leading to earnings per share of $5.75 versus a forecast for $3.14, the third sizable EPS beat this year.
Summary
- Stock has fallen nearly 25% from all-time high.
- Earnings report showed a growing divide in business.
- Will people start looking at valuation in the near future?
Source: Fortune, SeekingAlpha
