Amazon shares drop nearly 20% after company predicts weaker holiday sales

Amazon shares dropped close to 20% in after-hours trading on Thursday after the company said its all-important holiday shopping season would be smaller than expected.

The company is the latest tech giant to disappoint Wall Street this week. After enjoying phenomenal growth during the pandemic, Amazon has struggled to contain costs as inflation and rising interest rates have taken their toll. The company has slowed the rollout of new facilities, leased out some warehouse space and enacted a hiring freeze in parts of its business.

Amazon said it expected net sales of between $140bn and $148bn in the fourth quarter, and analysts were expecting sales to come in at $155.15bn.

In July Amazon reported its second quarterly loss in a row, much of the loss was due to its investment in Rivian Automotive, a struggling electric vehicle manufacturer, but rising costs and slowing sales also dragged down sales at its online store business.