Amazon.com Inc and Alphabet Inc tumbled in the wake of disappointing revenue growth, costing investors big money.
The losses wiped out US$82 billion in stock-market value, a milestone that brings back memories of Facebook Inc’s second-quarter debacle.
Amazon fell 7.8 percent on Friday, erasing about US$66 billion in market value. It was its biggest one-day market-capitalization drop ever and one of the five biggest for any US stock.
Photo: Reuters
Google-parent Alphabet’s 1.8 percent decline cut its market capitalization by almost US$16 billion.
While Friday’s losses reaffirm Amazon’s and Alphabet’s membership in the dubious history book of market-cap collapses, they are nowhere near taking the individual title.
That record belongs to Facebook, which in July became the first US stock in history to shed US$100 billion in value in a single session, after reporting disappointing quarterly sales and user growth.
The stock sank 19 percent over the course of a single trading session, carving about US$120 billion off its value.
Amazon’s market cap was US$803.3 billion as of Friday’s close. Microsoft Corp (US$821 billion) reclaimed the title of the world’s second-most valuable company, behind Apple Inc (US$1.04 trillion). Fourth-ranked Alphabet now has a value of US$749.1 billion.
Amid a broad sell-off in Internet stocks, investors have found a renewed appreciation for legacy tech names.
Companies such as Microsoft, Apple and Intel Corp offer exposure to the industry’s higher-than-average growth rates, but without the outsize valuations and risk that have marked momentum favorites such as Amazon, Facebook and Netflix Inc.
As a key driver of the broader market sell-off, technology stocks are on track for their biggest monthly drop in a decade. While legacy names have not been immune, they have held up better than modern-day bellwethers.
Apple, for example, has fallen 4.2 percent in the month to date, while Intel has fared better, thanks to a post-earnings rally on Friday. Microsoft is off 6.5 percent, but that is almost half of Facebook’s 12 percent collapse over the same period. Amazon is on track for its worst monthly performance in almost 10 years and Netflix has shed one-fifth of its value.
The broad sell-off “is based on worries about global growth, so if you’re priced for very rapid growth, or if investors start to worry you can’t deliver that growth, you become vulnerable,” Avalon Advisors co-chief investment officer Bill Stone said. “If you’re a high-growth stock, those expectations come with their own dangers.”
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