Amazon stock is now down nearly 50 % this year, as it heads for an annual loss after putting up more than $55 billion in profit over the previous two years
Amazon.com Inc. shares closed lower than their March 2020 nadir for the first time Thursday, as the tech giant’s stock heads for its worst year since the dot-com bust.
Amazon AMZN, -3.43% shares fell 3.4% on Thursday to $83.79, their lowest closing price since March 12, 2019, on the second-highest daily volume in the S&P 500 index SPX, -1.45%, behind only Tesla Inc. TSLA, -8.88%. Amazon is the 45th S&P 500 stock to eclipse its 2020 closing low since the beginning of the COVID-19 pandemic, and one of only 26 to close below that figure on Thursday.
Amazon shares are down nearly 50% so far this year, at 49.7%, while the S&P 500 has declined 18.6% and the Dow Jones Industrial Average DJIA, -1.05% has fallen 8.2%. It would be Amazon’s second-worst year on record, behind only the dot-com-bust year of 2000, when Amazon stock declined 79.6%.
Amazon is headed for a loss on the year after putting up profit of nearly $55 billion collectively in 2020 and 2021, though it would be on course for profit without accounting for losses stemming from its investment in Rivian Automotive Inc. RIVN, -6.18%. Revenue growth has also slowed tremendously this year, and Amazon has begun trimming costs and its workforce after years of phenomenal increases.
Amazon’s e-commerce business is expected to produce roughly flat revenue in 2022 from 2021, as a boom in online sales during the first two years of the pandemic flattens out. The company’s cloud-computing division — Amazon Web Services, or AWS — has exhibited a slowdown in revenue growth as well, while continuing to provide the majority of Amazon’s operating profit.
Amazon stock ended the day with a market capitalization slightly shy of $855 billion, after falling out of the trillion-dollar club early last month. Only three public U.S. companies are currently worth more than a trillion dollars — Apple Inc. AAPL, -2.38%, Microsoft Corp. MSFT, -2.55% and Alphabet Inc. GOOGL, -2.03% GOOG, -2.20%
Wall Street is still bullish on Amazon’s chances to reverse its slide, however. Out of 54 analysts tracked by FactSet, 49 have the equivalent of a “buy” rating on the stock, with four “hold” ratings and a single “sell.” Analysts’ average target price as of Thursday was $134.64, according to FactSet, more than 60% higher than the going rate.