Shares of the e-commerce and cloud giant plunged 51% this year, wiping hundreds of billions of dollars off its market cap.
Amazon's market cap has shrunk to about $834 billion from $1.7 trillion to start the year. The companyGet Chicago local news, weather forecasts, sports and entertainment stories to your inbox.Much of Amazon's misfortunes are tied to the economy and macro environment. Soaring inflation and rising interest rates have pushed investors away from growth and into companies with high profit margins, consistent cash flow and high dividend yields.
But Amazon investors have had other reasons to exit the stock. The company is contending with slowing sales, as predictions of a sustained post-Covid e-commerce boom didn't pan out. At the height of, consumers came to depend on online retailers like Amazon for goods ranging from toilet paper and face masks to patio furniture. That drove Amazon's stock to record highs as sales soared.
As the economy reopened, consumers gradually returned to shopping in stores and spending on things like travel and restaurants, which caused Amazon's impressive revenue growth to fade. The situation only worsened at the start of this year, as the companyfounderat the helm in July 2021, admitted that the company hired too many workers and overbuilt its warehouse network as it raced to keep up with pandemic-era demand.
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