Amazon became the first publicly traded business to lose $1 trillion in market value during a single stock-market downturn.
Amazon reached this record in November 2022, when its market capitalization fell from a peak of about $1.88 trillion to below $879 billion. The decline reflected a sharp fall in the share price rather than the disappearance of $1 trillion in cash from the company’s accounts.
Higher interest rates were a major factor. When rates rise, investors often place lower present values on distant future profits, which can weigh heavily on fast-growing technology companies. Amazon also faced slower post-pandemic growth and rising operating costs.
Market capitalization is a moving calculation based on the share price and shares outstanding. Consequently, a company can lose a trillion dollars of market value without paying out that amount or transferring it to another firm. The record describes changes in investor valuation.