Amazon's stock price zipped past $2,000 on Friday after the company reported much better than expected earnings and sales for its holiday quarter.
Amazon's share price went through the roof Friday after the company reported much better than expected quarterly results. | Image: AP Photo / Mark Lennihan, File
Shares of Amazon.com (NASDAQ:AMZN) surged on Friday after the e-commerce giant’s quarterly earnings report blew past expectations – a sign that its investment in faster delivery times was already paying off.
After gaining over 12.5% in after-hours trading on Thursday, Amazon’s stock price opened sharply higher Friday morning. AMZN peaked at $2,055.72 a share, up 9.9% from the previous day’s close. At its current pace, the stock is on track to set new all-time highs.
The stock would eventually settle at 2,008.72, having gained 7.4%.
The intraday rally pushed Amazon’s market capitalization back above $1 trillion, putting it in elite company alongside Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Google-parent Alphabet (NASDAQ:GOOGL) [VentureBeat].
By the end of trading, Amazon’s market cap stood at $996.92 billion.
Amazon was one of the only bright spots in the U.S. stock market on Friday. The technology-focused Nasdaq Composite Index plunged 1.6%. The large-cap S&P 500 Index was off 1.8%%, with losses spread out among ten sectors. Energy companies were the hardest hit, falling 3.2% on average.
U.S. equities crashed over fears of a worsening coronavirus outbreak. As Yahoo Finance reports, U.S. authorities have declared a national health emergency with Delta, American and United halting all flights to China.
The catalyst for Amazon’s record breakout was a much better than expected earnings report on Thursday. The Seattle-based company generated $6.47 in per-share earnings on revenue of $87.44 billion for the quarter ended December. Analysts in a median forecast were calling for an EPS of $4.04 on revenue of $86.02 billion.
A deep dive into the numbers revealed another stellar quarter for Amazon Web Services (AWS), the flagship cloud offering. AWS generated $9.95 billion in revenue for the quarter, well above forecasts of $9.81 billion.
Amazon owns nearly half of the public cloud infrastructure market, according to Forbes, and is the de facto leader in the rapidly growing industry.
Amazon’s investment in one-day shipping also appears to be paying off, especially during the holidays when demand for faster delivery times is greatest. Amazon Prime – the program that offers one-day shipping – now has 150 million subscribers.
Beyond the obvious growth drivers, Amazon appears keen on growing its advertising business at a time when companies like Facebook are under the political microscope. As MarketWatch reports, sales in Amazon’s “other” category, which includes advertising, grew 41% year-over-year.
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Last modified: September 23, 2020 1:33 PM
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