Last year, several tech companies achieved a market valuation of $1 trillion. Tesla, Apple, Google, Microsoft, and even Amazon were valued at at least R18 trillion in 2021. The market for these companies looks a little less like the GDP for a small country these days.
Amazon has perhaps the most ignoble distinction — the American company has become the first to lose more than $1 trillion in value. Last year, the company’s market cap was $1.88 trillion. This year? ‘Just’ $870 billion.
Deforesting the Amazon
The drop in the company’s value is part of a broader trend. Tech companies spiked hard during the COVID lockdown. It appears that economic activity is returning to pre-pandemic levels, however. It’s less affordable to throw money at Amazon when you need to pay for fuel to go to the office every day.
Other companies are in the same boat. Meta invested heavily based on what it thought was a permanent trend and, just this week, has had to shed 11,000 jobs. Last year, Meta was valued at more than $1 trillion. At the end of October, the company’s value hovered just under $290 billion.
Microsoft has also dropped almost $889 billion in value since last year, going from a previous high of $2.49 trillion to ‘just’ $1.67 trillion. These are all massive drops in company value, but none have reached Amazon’s trillion-dollar dip. The major question at this point seems to be: Who’s next? Apple, with a market value of close to $3 trillion, could well be the next to see a major drop in share price.
Source: Bloomberg