The share prices for Amazon experienced a huge downtrend in the latest trading session. The report shows that on Friday, the share prices for Amazon tumbled over 8%.
Amazon Shares Recorded a Dip
The dip was recorded after Amazon predicted that it is not expecting many sales in the fourth quarter of 2022.
According to the officials, the holiday quarter is going to prove a disappointment for their company in terms of sales. Right after the announcement, the shares of Amazon recorded a dip.
On Friday, Amazon shares recorded a downtrend, bringing its shares 50% lower than their all-time high. Due to the recent downtrend, Amazon’s overall valuation has dipped to $940.8 billion.
Predictions for the Fourth Quarter
On Thursday, Amazon officials announced that they are expecting their revenue for the fourth quarter would be in the lower ranges.
As per the officials, they expect their revenue for the fourth quarter to fall between $140 billion and $148 billion. However, the consensus that the analysts had shared for the same quarter was much higher.
The analysts had reportedly predicted that the revenue would be $155.15 billion. The estimation was made by the analysts at Refinitiv.
Third Quarter Earnings
Even the earnings for the third quarter as reported by Amazon were not strong or up to the estimations.
Amazon posted that the revenue it generated for the third quarter was worth $127.10 billion. However, the estimation that the analysts had made was $127.46 billion.
Despite being lower than the estimations, the year-over-year revenue growth was 15% higher.
Amazon reported that the year-over-year revenue for the cloud business was 27.5% higher. Still, it was the slowest growth they recorded for the cloud business since 2014.
Other Tech Giants faced the same Downtrend
Amazon was not the only tech giant that reported slowed earnings. Other major companies such as Microsoft, Meta, Alphabet, and Amazon also faced the same downtrend.
All major tech companies reported losses in their earnings for the third quarter. They are also predicted slowed sales in the running and the upcoming quarters.
For almost every business, it is the macroeconomic downtrend that is dragging down the performance of their businesses. They have also attributed losses in sales/revenues to high interest and inflation rates.
The companies are also fearing recession in the upcoming quarters and are bracing themselves for the major impacts.
Price Targets or Q4
Given the recent announcement and earnings posted by Amazon, many analysts have taken notes, reducing their price targets for Amazon shares.
One of the major firms such as JPM Securities has also reduced its price target for the fourth quarter, bringing it down from $150 to $140.