Surprisingly, Amazon’s digital infrastructure business, Amazon Web Services, also missed market expectations, pulling in revenues of $20.5bn.
Neil Campling, at Mirabaud Securities, said: “Retail and consumer weakness is hardly a new theme or shock. Nor is inflation or logistic challenges. But the speed of cloud slowdown is going to surprise many investors.”
Andy Jassy, Amazon’s chief executive, said: “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.”
The plunge in Amazon’s share price also wipes billions from the net worth of its founder Jeff Bezos. Mr Bezos was worth $140bn before tonight’s share price plunge, according to Bloomberg’s Billionaires Index, most of which is made up of Amazon stock.
The huge fall in Amazon’s market value is one of the biggest one-day sell-offs of all time. Meta’s market value fell by more than $230bn in one night after disappointing results in February.
Meanwhile Apple, the world’s most valuable company, worth over $2 trillion, beat market expectations, reporting revenues up 8.1pc at $90.1bn, a record for September.
Apple released its iPhone 14 in September, which despite a lukewarm critical reception helped push iPhone sales to $42.6bn, up 9.7pc year on year but slightly below market expectations. Shares nonetheless dropped by 3pc, equivalent to $69bn.
Reports from Apple’s supply chain had suggested in recent weeks that it has pared back production of some iPhone models amid lower than expected demand for the handsets.
Apple has increasingly relied on boost revenues from its “services” division, which is made up of its Apple Music, TV, iCloud storage and App Store fees. This week, Apple hit consumers with an inflation-busting price rise for its Apple Music and Apple TV products.
Apple Music increased its monthly price from £9.99 to £10.99, more than rival Spotify. Apple TV+ increased in price from £4.99 to £6.99. It reported services revenues of $19.1bn, up 4pc.
Amazon, meanwhile, has put the brakes on hiring in its corporate teams and slowed down opening new warehouses under new chief executive Jassy, who took over from founder Jeff Bezos last year.
Amazon has also been slashing its warehouse and logistics headcount this year, with staff numbers falling by 100,000 over the summer compared to last year as it prepares for weaker sales.
It comes amid a global rout of technology stocks driven by dismal earnings reports from Meta, the parent company of Instagram and Facebook, and Google so far this week.
After enjoying surging growth during the coronavirus pandemic, when consumers were stuck at home and forced to rely ever more on digital technology, tech stocks have sunk so far this year.
Market slowdowns tend to hit technology stocks more harshly, since they are typically valued to account for their long-term growth.
But a combination of inflation, mounting costs, a collapsing digital advertising market and a poor set of earnings has sucked the optimism from tech investors.
Mark Zuckerberg, Facebook’s chief executive, lost $10bn from his personal net worth on Thursday as shares in Meta plunged 25pc after it reported rising costs on Wednesday night amid falling digital advertising sales.
Mr Zuckerberg has bet the company’s future on so-called Metaverse technologies, which rely on virtual reality. But so far billions of dollars in investment have not translated into revenues.
