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- Amazon surged 13% in Friday's pre-market after posting strong fourth-quarter earnings in which it raised the price of its Prime service.
- It put the company on track for one of the biggest one-day valuation surges in US history when the market opens at 9.30 a.m. ET.
- Tech stocks have had a wild week, with the Nasdaq 100 index tumbling 4% on Thursday as Facebook parent Meta plunged 26%.
Amazon stock jumped 13% in pre-market trading on Friday as investors cheered its strong fourth-quarter earnings, in which it raised the price of its Prime subscription service.
The surge in the pre-market stock price meant Amazon could be poised for one of the biggest one-day valuation surges in history, a day after Facebook parent Meta suffered the largest ever corporate wipeout, losing more than $230 billion after posting weak earnings.
Amazon rose 12.71% in pre-market to $3,129.79 as of 4.06 a.m. ET, helping boost tech stock futures. 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 after the bell on Thursday.
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 when trading opens at 9.30 a.m. ET, Amazon would add nearly $180 billion in market value in what would be one of the biggest valuation gains in history. Its market capitalization stood at $1.41 trillion as of Thursday's close.
However, 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 tumbled 4.22% in its largest one-day slide since September 2020.
However, stock futures rose Friday on the back of Amazon's earnings. Nasdaq 100 futures were 1.48% higher and S&P 500 futures were up 0.76%, suggesting a strong start to trade after the opening bell.
from Business Insider https://ift.tt/Y56EbXh
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