Shares of Amazon (NASDAQ: AMZN) tumbled nearly 50% in 2022, a far worse performance than that of the broader market. The S&P 500 shed a bit less than 20% of its value last year as pandemic darlings were beaten to a pulp.

One reason for Amazon stock's terrible performance was its incredible performance leading up to this big decline. The stock rocketed 76% higher in 2020, fueled by strong growth for the company's cloud computing business and an unprecedented boom for the e-commerce industry. Amazon stock largely treaded water in 2021, holding on to those gains until last year.

Amazon vastly expanded its e-commerce operations during the first two years of the pandemic to meet demand, and now it has far too much capacity as consumers pull back. The company has closed or cancelled dozens of facilities as it works to bring costs back in line with demand, and it's reportedly reviewing business units that are chronically unprofitable.

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Source Fool.com