Amazon lost 75 billion dollars in value and this could be a long term problem for the stock.

After earnings reports, Amazon’s market cap dropped over 75 billion in value due to disappointment from stock holders.
What went wrong?

They made 100 billion dollars in 3 months…

Amazon for the third time in a row made 100 billion dollars in one quarter.

That seems like not a big deal, but here’s why the letdown happened.

Amazon made 63 billion in the second quarter of 2019.

They made 89 billion in the second quarter of 2020.

Growth of 41%.

This year, they made for the second quarter, 113 billion.

Growth of 27%.

Between 2019 and 2020, they gained 26 billion in new revenue.
2021, the quarter picked up 24 billion.

While the actual number was only 8% higher cash wise, the growth wasn’t as high and people were let down.

This doesn’t really make a lot of sense where a company can make 24 billion dollars more in 3 months versus those same 3 months a year prior and have stock go down, but here’s the issue.

Amazon made 21 billion in profit in 2020.

They made 386 billion in revenue.

A 5.4% margin.

Quick comparison, Facebook made 29 billion in profit and had 85 billion in revenue.

Amazon made more money in 10 weeks than Facebook made in the entire year of 2020, but Facebook made more profit.

Facebook, Microsoft, Apple and many more are way higher margin than Amazon is and really ever could be.

People like tech for fast growth and high margins.

Amazon likely will find 40% growth years harder to find going forward and never be able to break a 10% margin.

This makes it so people buying stocks could see them more like Walmart and less like Apple.