San Francisco (October 27, 2018): Microsoft regained its spot as the second most valuable US company on Friday after a disappointing quarterly report from Amazon.com wiped $65 billion off the online retailer’s market capitalization.
Amazon’s shares dropped 7 per cent, the most in nearly three years after its holiday season sales outlook missed targets, fanning concerns that Wall Street’s tech darlings are finally starting to face stronger competition.
Microsoft fell a more modest 1.1 per cent in a broad technology sell-off that was also driven by a weaker-than-expected report from Google-parent Alphabet, leaving the Nasdaq composite index. IXIC down 1.9 per cent late Friday afternoon.
Shares of Microsoft remain up nearly 4 per cent from Wednesday, when the four-decade-old software company beat quarterly profit expectations, driven by its cloud computing business that competes with Amazon’s.
Its stock market value on Friday stood at $823 billion, on track to close above Amazon’s for the first time since April, when it gave up its spot as a second largest company by market capitalization.
Amazon’s tumble left it up around 40 per cent year to date, while Microsoft has gained about 25 per cent in 2018. On Wednesday, Amazon’s stock traded at the equivalent of 70 times expected earnings, its lowest level since 2011.
The average analyst price target for Microsoft puts its market cap at $963 billion, while the average price target for Amazon values it at $1.068 trillion.
Apple will report quarterly results on November 1.
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