As the value of Amazon falls below $1 trillion, this chart shows just how dramatically the biggest tech heavyweights have fallen.

As the value of Amazon falls below  trillion, this chart shows just how dramatically the biggest tech heavyweights have fallen.

November 1st, Amazon hit a grim milestone when its value dipped below $1 trillion for the first time since it first crossed that milestone in early 2020. The e-commerce giant closed at $96.79, down 5.5% on the day and 20% in the last five sessions, most of the decline came after a weak third-quarter earnings report on October 27. In that span, Amazon’s market capitalization dropped by $250 billion or a quarter-trillion dollars to $987 billion, one of the biggest dollar drops over a one-week period in annals. of the capital markets.

Amazon is the newest of the unique “Trillion Dollar Club” to lose your membership. As recently as February, no less than six companies: Amazon, Apple, Microsoft, Alphabet (Google), Meta Platforms (Facebook) and Tesla, all with valuations above twelve figures. Since then, Meta was the first to leave the elite assembly followed by Tesla, so Amazon’s exit cuts the list in half to Apple, Microsoft and Alphabet. At their respective peaks (all reached last November and December, except for the Meta summit in August 2021), the current and former crew of Trillion Dollar put up a combined valuation of $11.75 billion. Last November, those half-dozen high-flyers accounted for a staggering 21% of the total value of the nasdaq 100.

Since hitting their highs, the six have lost a combined $4.35 billion, or 37% of the nearly $12 billion they had at their peaks. That’s the equivalent of more than 14% of the top 100’s current market capitalization of roughly $30.6 trillion. Overall, from its highest ticks to today, the trillions contingent has outpaced the Nasdaq 100’s 32% drop from its November record by 5 points.

Each of the former Trillion Dollar Club has fallen by at least half a trillion dollars, with Tesla falling by $517 billion, Apple $547 billion, Alphabet $771 billion, Meta $831 billion, Amazon $837 billion and Microsoft $846 billion. The famous largest percentage decline was Meta with (-77%), followed by Amazon (-45%), Tesla (-42%), Alphabet (-39%) and Microsoft (-32%). Best performer: Apple at -18%. The iPhone maker’s $2.44 billion valuation (which briefly touched $3 billion in January) makes it the sole occupant of the $2 billion super-exclusive clubhouse it once shared with Microsoft (now $1, 7 billion) and Alphabet ($1.18 billion).

Despite their big downfalls, the former and current Trillion Dollar Club mates are anything but cheap.

In general, what we will call the big six are still expensive, even after their epic withdrawal. Think of them as a large company that we’ll call Triple A-MMT, Inc. In total, Triple A-MMT earned $259 billion in the last four quarters. Therefore, the combined PE is still an expensive 29. Of course, some seem much more expensive than others. Despite the recent big revaluation, Amazon is trading at 94 times earnings, and Tesla’s PE stands at 71. Apple and Microsoft share a multiple of 25, meaning the market expects strong earnings growth in those markets. valuations still rich in near-historic gains. . Meta’s EP is only 9, but his earnings are falling rapidly, making it difficult to calculate a stable relationship based on where they will ultimately settle. The only “member” that’s even remotely in value territory: Alphabet at a market multiple of plus or minus 18.

The emptying out of the former Trillion Dollar Club represents a historic requalification of tech titans who were already expensive before COVID hit, then benefited greatly from the stay-at-home economy that pushed their profits to what now seem like mountain tops. slippery We were primarily told by Wall Street stock analysts and strategists that their earnings would grow from those gargantuan levels never seen before to justify their caps of more than $1 trillion for Meta, Tesla and Amazon, to $2 trillion and higher for Microsoft and Alphabet. . , and for Apple, approximately 3 billion dollars. But the economy is not only getting back on track, it is far below average. Benefits that could not continue to increase Unexpected highs are now falling predictably, and crushing valuations in the process. It was only a matter of time before gravity caught up with him. And he trashed the Trillion Dollar Club.

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