Amazon has suffered its slowest growth for two decades, knocking $150b off its value on Thursday, as the pandemic internet shopping boom ground to a halt.
The online retail giant said revenues rose by 7 per cent in the first three months of the year to $116.4b. This was theslowest growth since 2001, in the aftermath of the dotcom bubble.
It also revealed its first loss since 2015, as costs soared and it took a heavy hit on its investment in the electric carmaker Rivian.
Shares fell almost 10 per cent in after-hours trading as the company issued disappointing forecasts for the next quarter. It said sales could grow by as little as 3 per cent, well below Wall Street forecasts.
Amazon is grappling with rising cost of fuel and shipping, as well as higher wages and supply constraints due to shutdowns in China. It has warned investors to expect lower profits as it grapples with costs.
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The figures come amid questions over the sustainability of the online shopping boom as economies continue to reopen.
Internet sales accounted for 26.1 per cent of all UK retail spending in March. This was the lowest level since March 2020, when the first coronavirus lockdown was introduced and down from a peak of 37.8 per cent in January 2021.
Sales were boosted by growth at Amazon's cloud computing division AWS, as well as higher advertising revenue. Its core online retail business, which accounts for almost half of revenues, suffered a 3 per cent drop.
The company posted a US$3.8b loss - its first red ink since 2015 - compared with an US$8.1b profit a year ago. It took a US$7.6b writedown on Rivian, whose shares have plummeted since the electric carmaker's blockbuster US flotation in November. (Amazon holds an 18 per cent stake in Rivian.)
Amazon's slowdown in growth poses a challenge for Andy Jassy, the company's chief executive, who took charge from founder Jeff Bezos last summer.
Mr Bezos, the world's second-richest person, had run Amazon since the company was founded in 1994 and remains in place as executive chairman.
Mr Jassy said: "The pandemic and subsequent war in Ukraine have brought unusual growth and challenges." He said the company would be seeking to save costs "as we work through ongoing inflationary and supply chain pressures".
Amazon suspended all shipments to Russia and Belarus in March and said it would no longer accept new merchants from the countries seeking to sell goods to customers.
The company did not have a large operation in the countries, but customers were able to order items to Russia from overseas versions of the website.
Apple surprises
Separately, Apple revealed its slowest quarterly growth for almost two years, although the company surprised investors with better-than-expected figures.
The Silicon Valley giant posted revenues of US$97.3b, a 9 per cent rise, and said profits rose 6 per cent to US$25b.
While this was its third-biggest quarter ever by sales, it was the weakest growth the company had recorded since the autumn of 2020, when pandemic supply chain hold-ups delayed the release of its new iPhones.
Apple has recently been hit by Covid lockdowns in China, which have interrupted production at plants in Shenzhen and other cities.
Apple CFO Luca Maestri said that Covid disruptions in China and silicon shortages are making it difficult to make enough product to satisfy customer demand.
The supply constraints will cost Apple US$4b to $8b depending on how long it takes suppliers in China to get back up and running.
According to Apple CEO Tim Cook, the supply issues are all centered on the Shanghai corridor, and while almost all factories are now reopened, it will take some time for them to ramp back up to standard output levels. Apple expects constrained supply until the third quarter.
As of now, the supply issues have primarily affected iPads and the higher-end MacBook Pro models. Cook says that going forward, most product categories will be impacted, and this will ultimately affect Apple's June quarter revenue.
Shares rose by around 2 per cent in after-hours trading as the company raised its dividend and said it would return US$90b to shareholders through share buybacks.
