Amazon lost half its value this year as tech stocks got crushed and recession fears grew

Submitted by predictany007 t3_zya1j1 in wallstreetbets

It was a brutal year for mega-cap tech stocks across the board. But 2022 was especially rough for Amazon.

Shares of the e-retailer are wrapping up their worst year since the dot-com crash. The stock has tumbled 51% in 2022, marking the biggest decline since 2000, when it plunged 80%. Only Tesla, down 68%, and Meta, off 66%, have had a worse year among the most valuable tech companies.

Amazon’s market cap has shrunk to about $834 billion from $1.7 trillion to start the year. The company fell out of the trillion-dollar club last month.

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 the pandemic, 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 company confronted higher costs tied to inflation, the war in Ukraine and supply chain constraints.

Amazon CEO Andy Jassy, who succeeded founder Jeff Bezos at 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. It’s since paused or abandoned plans to open some new facilities, and its head count shrank in the second quarter.

Full article: https://www.cnbc.com/2022/12/29/amazon-shed-half-its-value-in-2022-as-tech-stocks-got-crushed.html

Amazon (AMZN) is set to close its worst year since 2000 and second worst on record as the stock is currently down 51% YTD, lost half of its value this year due to fears on recession. How much further do you think AMZN will fall next year?

107

Comments

You must log in or register to comment.

Kind-Relationship559 t1_j251xl7 wrote

Buying on Amazon or online has become a habit and part of life. No one is closing down their Amazon accounts like we all did for FB.

61

0x11C3P t1_j253u32 wrote

Sure. But people are getting rid of their prime status or sharing it.

15

Rico_Stonks t1_j25z6ar wrote

More Americans have prime than go to church, and it continues to grow. At this point prime for households is like Microsoft office for businesses, very sticky.

38

reditor75 t1_j25hl66 wrote

Or not having one ever like me img

8

newebay t1_j26342p wrote

I don't get prime account. My deliveries are free anyway and seemingly just as fast

2

RedSpikeyThing t1_j294f1a wrote

It depends on your location. Mine are neither free nor speedy, so prime is helpful.

1

ChemDude999 t1_j284c7v wrote

I don't think that's the case at all. I talk about this frequently with friends and NO ONE is trading in their prime account. You get too much bang for your buck with streaming, shipping and deals. Trust me, a few of my friends are dirt poor and should probably focus on their necessary bills instead. Now Netflix, that's a different story. Especially after Cuties and all the social movement stuff (BLM/LGBTQ+) people are dropping it more frequently compared to Amazon prime. Not saying it's right or I agree with their choices (not debating), but it's simply a fact that I've personally observed. The reason I bring it up is because I know a few people who are very much AGAINST those movements, and even then when Amazon was really pushing it all they never opted out of their prime membership.

My advice, LONG calls on Amazon. Once the economy levels out and we see growth again, that shit'll bounce up pretty high. Maybe not covid high for a while, but I could see a 25-50% from current levels easily.

3

wotton t1_j28tacd wrote

Amazon will rally in 23. It’s a staple of the economy. This valuation will look so cheap in 2 years.

1

CallipygianP t1_j27wpk2 wrote

Yeah like you closed your WhatsApp and Instagram too, right? Right?

1

solovino__ t1_j24o2b9 wrote

Revenue is steadily increasing quarter over quarter, PE is high and Net Margin is low due to reinvestments in the business, PS 1.68.

Already started building a position. Even during the 08 crisis, eBay did not show signs of significant slow down. Online purchasing is not a luxury. It’s a necessity. The world relies on purchases via mail. Perfect time to start buying for me at least. Hoping it continues to drop.

33

tngman10 t1_j27c19y wrote

Amazon is on my watch list as well but I will say that from a personal perspective in the last year Wal-Mart has gained ground on Amazon and maybe even passed them up at least in the online shopping aspect.

The last several years I done most of my Christmas shopping on Amazon. But this year more than half (almost all for my kids) was done on Wal-Mart. They had better prices on nearly everything. And the things I ordered got here faster as well even though I'm only 20 minutes from an Amazon center.

They also do the in-home grocery delivery which Amazon doesn't do in my area.

I know Amazon is more than just the retail aspect and there is more than enough market share for both companies. Just something I'm keeping my eye on in case my experience isn't unique.

2

Hacking_the_Gibson t1_j27bfgq wrote

Same here. My current average is $85.

I am also buying just about as much TQQQ as I can get my hands on. Easy 3-4x from here.

1

unix_enjoyer305 t1_j28bqfw wrote

One major sign for Amazon would be prime subscriptions falling. Until that happens, it's a buy.

1

Maniksewak t1_j28f8hu wrote

Every quarter in 2022 had less revenue than final quarter in 2021. And their P/E ratio is crazy high. Amazon going down to 50

1

ElectronicImage9 t1_j25gglp wrote

Why the fuck you buying if you hope it drops. Just buy after it drops regard

−5

solovino__ t1_j25s442 wrote

Idk when the bottom will be. I just know $83 is a fair price and I won’t risk trying to time the market.

10

sargrvb t1_j25scj7 wrote

You're right, they should try to time the bottom. That has been proven to work mathematically over the years. I know this because I'm very smart.

8

trentsim t1_j27n7nf wrote

Because it will go back up, and if it drops they'll buy more

1

Swimming-Book-1296 t1_j24v5qk wrote

It wasn’t “tech stocks” it was any growth stock. Growth stock valuation depends on the risk-free rate.

20

0x11C3P t1_j24lfv7 wrote

About 20% more before it starts trending back up.

19

4troglodyte t1_j24onyi wrote

What is the basis of your expectation for a 20% leg down from here? Have you included AWS expectations in your calculus? Thanks

11

0x11C3P t1_j24pb1o wrote

Dwindling e-commerce. AWS no longer growing at growth valuation rate. Increased borrowing costs. Overcapacity. Looming recession. Fed rates not being cut till end of 2023/early 2024.

I made a model after their last disappointing earnings and with certain guesstimates, I came to somewhere 20% below from here.

I'm not saying it'll go straight down from here. There will be choppiness but I gather it'll hit somewhere near bottom around 20% as they try and finally cut some overhead.

9

4troglodyte t1_j24r0a8 wrote

I appreciate your DD and thoughts about the trajectory of the stock. I entered into my first position beginning last Thursday and Friday. I added another 100 shares yesterday and hoped to add another 100 shares today but it has lifted back off this morning. I want to hold a small 700 share position (600 now) and stay long for 24 months barring black swan. I concede AWS penetration has slowed but don’t believe it is adequately valued in overall stock price. I stand by recovery to $170 by first quarter of 2025. Thanks for taking a minute to help me understand your premiss🙏🏻

12

0x11C3P t1_j24rync wrote

If you believe in the company, just DCA into it. I could be wrong as I'm not a wizard. I just feel the era of growth companies is gone for the time being and most growth companies, if they survive, won't hit recent high valuations for years.

10

Hacking_the_Gibson t1_j27bul4 wrote

The problem with handling Amazon earnings since EOY 2021 is that shit stick RIVN bet they marked to market for a blowout Q4 and then got massacred in Q1 2022 on.

The fact is that Amazon's revenue has doubled since 2017/2018, which is the last time you could buy the equity at $85ish. Considering they figured they could cut 20,000 people, I imagine they have plenty of net income they can squeeze out before their core businesses start to suffer.

If it does drop another 20%, I will be pleased as punch because that means I will virtually triple my money over the next 3-5 years.

3

redditbebigmad t1_j24sm8m wrote

Why? Bezos didnt buy twitter.

11

ElectronicImage9 t1_j25gm4r wrote

For real wtf reddit told me your company drops only when you buy twitter

Some of these motherfuckers bought 2 twitters it seems

8

Shebalied t1_j25laeu wrote

I love how dumb normal reddit is. /r wsb we know we eat glue. Other mf's think they are smart. OMG Elon is going to go lose all his money because of twitter lol. Just don't look at all the tech stocks.

With that said, 100% Apple is going to get fucked and crush the spy. I can't wait!!!! Sqqq is loaded up been a good month so far.

5

ElectronicImage9 t1_j25o2j9 wrote

Ya it's looking bad for apple unless Pappa xi does something.

I'm bag holding too. Rip

2

Epena501 t1_j263l7e wrote

#Amazon is not going anywhere. Now is the time to stock up on it.

10

Meanie_Cream_Cake t1_j24rh62 wrote

They were pumped up with free credit and margins. Now those debts are getting expensive so folks are selling out to cover themselves.

Finance 101

7

Quicklyquigly t1_j27d2y6 wrote

It’s bc Amazon sux now. It used to be page after page of original stuff. Type what you want in, endless choices. Now if you look for a couch, a sweater, a rug it’s just the same 5 Chinese crap things over and over again. It turning shitty has saved me thousands bc it used to be fun and convenient now I don’t want any of their plastic trash and neither does anyone else.

7

Stachemaster86 t1_j27fg2e wrote

That’s half my issue is that crap. The other half is, I want a bag of peanut M&M’s I know are $12 at my store, I’ve got a thousand different hits and pack outs to figure out. I wish there were a store mode like Target or Walmart so I can dial in shit that I normally see and am actually looking for. At least eBay for other things I can filter down to US only and reduce noise. I just never really got Amazon once the other retailers caught up with searching.

2

Relevant-Nebula8300 t1_j2535zg wrote

I remember last year thinking AMZN was so laggard in 2021 bet it’s gonna pop 2022 so glad I didn’t follow through

6

AggressiveConcert56 t1_j26std7 wrote

for the life of me i cant see why this happened. other than increased pandemic costs and spending alot of money on expansion which has been in line with their core business plan nothing bad has happened to the company. amazon is raking money they are not some overvalued tech company operating at massive losses. other than apple i cant think of a better company to just continue to invest in over time.

4

Hacking_the_Gibson t1_j27c6fy wrote

The big tech sell off makes absolutely no sense whatsoever. Hell, once Zuck realizes that $10B annually isn't going to buy him any additional friends, even META will come back because profit is absolutely paramount in this market.

Lots of complete dogshit has been getting murdered and rightfully so, but to watch GOOG, AMZN, and META be treated like some shitty SPAC? Makes me want to invent a time machine to fast forward 3 years to when I will be sitting on $2M, LOL.

1

v4bj t1_j26sb4n wrote

There really isn't a justification for the high PE valuations as tech companies settle into stable markets and new verticals slow. How many more new verticals does AMZ or TSLA have in them?

3

MASH12140 t1_j264ei3 wrote

Thank god folks will be buying less junk they don’t need img

2

ihsanbal t1_j27q2dn wrote

I don't understand why you guys calling this fall as crash Amazon was $89 before covid and now its $84. Its that simple. Call it crash if Amazon crashes another %50 at this point.

2

VisualMod t1_j24l0sn wrote

User Report
Total Submissions 0 First Seen In WSB 7 months ago
Total Comments 95 Previous Best DD
Account Age 8 months [^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.) [^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)

^^Discord ^^BanBets ^^VoteBot ^^FAQ ^^Leaderboard ^^- ^^Keep_VM_Alive >TL;DR: Amazon (AMZN) is set to close its worst year since 2000 and second worst on record as the stock is currently down 51% YTD, lost half of its value this year due to fears on recession. How much further do you think AMZN will fall next year?

1

VisualMod t1_j24l1gn wrote

>I think that Amazon will continue to fall next year as the economy slows down and people spend less money. The company is already facing slowing sales and higher costs, so I don't see how it can turn things around in the near future. I wouldn't be surprised if the stock falls another 50% or more over the course of next year.

1

HashPat1 t1_j26tydh wrote

“More Cowbell” please

1

Pale_Ground5062 t1_j27kjlk wrote

We have been in a Recession for the past two months or even longer. It’s just that we have a bunch of morons who believe whatever the media wants them to believe. Smh 🤦🏻

1

Thunder_Wasp t1_j27phbk wrote

I still buy stuff on Amazon but it is getting harder to find what I actually need in the sea of knockoffs and overseas Marketplace sellers.

1

forgetful_storytellr t1_j27vuln wrote

I’m not only buying but I’m also buying long and short calls.

My technical analysis is that Amazon is fucking awesome and it’s currently half off

1

Sandvicheater t1_j28892o wrote

If Bezos keeps funneling $1 billion into money fire pit shows like store brand lord of the rings aka rings of power. And he cant get his house in order with all these union efforts.

I don't have a bullish outlook on this company but they're still the #1 online retailer so I don't have a bearish outlook either.

1

Independent_Row_Goes t1_j29sp0m wrote

What’s that line? If you invested $1000 in Apple every year since the iPhone came out instead of buying a new iPhone every year (counting depreciation) how much more would you have?

Now if you took $1000 and opened an amazon fba store and made double every year (of course net number) how much more would you have compared to buying $1000 in amazon stock a year?

1

BugTotal6212 t1_j2clx7d wrote

It's still over valued. Pe of 77 theres still room to fall. 50 by june

1

renok_archnmy t1_j26kvh1 wrote

I’m surprised people got tired of receiving open and clearly worn underwear, mis packaged clothing, and having to return endless pairs of shoes or pants that didn’t fit in some Sisyphean online retail/Whole Foods drop off dance so much so that they’re opting to just buy stuff the regular way that allows try ons and seeing oneself in the mirror first… and also that whole part about not lining Bezos union busting, labor law flouting, forced employee pissing in bottles pockets.

0

Royal-Application708 t1_j2739y3 wrote

Good. That means that fucktard Bezos is only worth half as much. Hope they both goto zero.

0

usrevenge t1_j283e9g wrote

I work at Amazon.

There is a big automation push. It's expensive. Buildings are getting multimillion dollar automation lines that won't see a "break even" in terms of investment for years.

Like 15 workers get replaced by a 2 million dollar retrofit.

0