Big bleeding for Amazon on the stock market. The company founded by billionaire Jeff Bezos saw its stock erode by more than 30% in the space of 24 hours. The reason is the company's poor performance at the end of the first quarter of 2024. More than 200 billion dollars are involved in this development.
A stock market crash estimated at $210 billion
Amazon's stock has suffered a spectacular fall on the stock market. In the space of a day, the latter lost more than 30% of its value. A decline which resulted in a loss of around 210 billion dollars.
This loss is not the result of chance. It comes in the wake of the publication of the company's quarterly results. Performances which are not good since the company announced a loss of 3.8 billion dollars on 1er quarter.
Amazon's poor performance at the end of this period is fundamentally unexpected although well below analysts' forecasts. According to the company, it is linked to inflationary pressure and persistent constraints in the supply chain.
Andy Jassy, Amazon's CEO, acknowledged the challenges faced, saying the company is focused on improving its productivity and profitability. But analysts remain cautious about the firm's future on the stock market. This, while the Amazon Web Services division posted an increase of 37% in 1er quarter.
Skepticism about Amazon's stock market developments
In the minds of some stock market experts, the signals are no longer green for Amazon's stock. Dan Romanoff, a stock analyst at Morningstar, notably reduced his price target on Amazon shares. The reason for this turnaround are concerns about the company's operating margin. He is at least cautious about improving the stock's value in the short term anticipating continued profitability challenges for Amazon throughout the months to come.
However, other analysts remain optimistic about Amazon's long-term prospects. Optimism based on the company's ability to resist cost pressures through superior operational efficiency. We still have to find it.
It should be noted that Amazon's stock market rout is far from being an isolated case in the technology sector. For example, Tesla also saw a 12% drop in its shares. The trend is similar for the Nasdaq.
Heavily focused on technology, the stock market is also having a tough time, posting its biggest monthly decline since October 2008. All appear to be bearing the brunt of widespread fears about slowing growth, rising interest rates and geopolitical disruption. .
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