Amazon gains $141 billion in value in one of the biggest surges ever following strong earnings, a day after Meta's $251 billion wipeout
- Amazon surged 10% on Friday after posting strong Q4 earnings and raising the price of its Prime service.
- It gained $141 billion in value, on track to log one of the biggest one-day market-cap surges in US history.
Amazon gained $141 billion in market value Friday, as its shares jumped 10% following the release of a strong earnings report in which it raised the price of its Prime subscription service.
It put Amazon on track for one of the biggest one-day valuation surges in history, a day after Facebook parent Meta suffered the largest ever corporate wipeout, losing $251 billion after posting weak earnings.
Amazon was up 10.01% to $3,054.86 as of 9.40 a.m. ET, helping boost tech stocks. It had closed 7.81% lower at $2,776.91 Thursday, caught up in a major tech sell-off after Meta's earnings.
The company's cloud computing section, Amazon Web Services, saw revenue increase by 40% year-on-year. Online store sales slipped by 1%, but Amazon's advertising business grew 32%, the company said in earnings released Thursday evening.
Here are the key figures:
- Net income: $14.32 billion, compared to a consensus prediction from analysts polled by Bloomberg of $2.01 billion. The figure was boosted by an $11.8 billion gain from Amazon's investment in electric vehicle company Rivian, which went public in November.
- Earnings per share: $27.75, compared to consensus of $3.77.
- Revenue: $137.41 billion, compared to consensus of $137.82 billion.
- Amazon Web Services revenue: $17.78 billion, compared to consensus of $17.23 billion.
Amazon said it had spent big in the holiday period to ensure customers got their packages, and as a result felt able to put up the price of a Prime subscription to $139 a year, from $119 a year previously.
"We saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron," Amazon CEO Andy Jassy said in the fourth-quarter earnings statement.
"Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic."
If the jump in the stock holds, Amazon's valuation gain would be the fourth-biggest ever for a US company, according to Bloomberg. Apple's $179 billion surge on 28 January this year, after it posted strong earnings, leads the list.
There's no guarantee that shares will remain elevated. Trading has been wild in 2022 so far, as investors brace for the Federal Reserve to raise interest rates to tame inflation. January saw some of the biggest one-day swings in tech stocks since the dotcom bubble of 2000.
Tech stocks tumbled on Thursday, as Facebook parent Meta plunged 26.39%, after saying rivals such as TikTok were putting it under pressure. The tech-heavy Nasdaq 100 index dropped 4.22% in its largest one-day slide since September 2020.
However, stocks edged higher Friday on the back of Amazon's earnings. The Nasdaq 100 was up 0.54% in early trading, and the S&P 500 was 0.31% higher.