Market cap

Amazon and Meta shares lost $160 billion in market capitalization after Big Tech earnings ‘horror show’

The Dow Jones just completed its fourth consecutive positive week, but make no mistake.

Big Tech executives like Amazon and Meta underperformed in their third-quarter earnings reports this week in a trend that Wedbush technology analyst Dan Ives called Big Tech’s “horror spectacle.” .

Ives argued in a Thursday note that low earnings from Meta and Amazon are proof that a new era has arrived for Big Tech as investors grow increasingly picky.

“In this softer macro, and with a recession likely on the doorstep, Big Tech management teams must quickly adapt to a very different backdrop or risk losing their shine for investors who have bet on these thoroughbreds. technology over the past decade,” he wrote. .

Amazon

Amazon missed earnings and revenue estimates from Wall Street on Thursday, and the company’s outlook for the fourth quarter was so poor that analysts at Bank of America argued it was proof that a “recession of consumption” was already there.

As a result, shares of the e-commerce leader fell 6.8% on Friday, dragging the company’s market capitalization down about $80 billion in a single day. And since July 8 last year, when Amazon hit its peak market capitalization of nearly $1.9 trillion, the company has lost nearly $800 billion in value.

For reference, only five companies even have a market capitalization of $800 billion or more worldwide.

Fortune

Morgan Stanley technical analyst Brian Nowak cut his price target for Amazon to $140 per share from $175 after the earnings release, noting that the company’s e-commerce and cloud computing businesses both suffered. slowed “faster than expected” in the third quarter.

But Nowak still believes Amazon will gain market share through competition whether or not a recession comes, and has maintained an “overweight” rating, similar to a “buy” rating.

Meta

Meanwhile, Meta reported a 4% drop in revenue and a 52% drop in profit in the third quarter. And the company’s eponymous virtual reality business has now lost more than $9 billion this year alone.

Earnings were so bad they sent the stock down about 25% on Thursday, slashing the company’s value by some $85 billion. And since Meta’s peak market cap of $1.07 trillion in August 2021, the company has lost some $800 billion in value.

Bank of America analysts, led by Justin Post, maintained their neutral rating on Meta stock after earnings, but cut their price target to $136 from $150.

Post and his team wrote in tongue-in-cheek language that Meta’s VR business costs “real” money, but the returns are still “virtual.” They also worry that with advertising spending slowing as recession fears grow, Meta will face additional pressure in the coming quarters.

Sign up for the Fortune Includes a mailing list so you don’t miss our biggest features, exclusive interviews and surveys.