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Stock market: Amazon stock soars!

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While Meta Platforms (Facebook) experienced a sharp fall (-23%) after the publication of disappointing results, the opposite is happening for Amazon stock!

Amazon: + 15% For The Title After The Close

If Facebook had lost nearly $200 billion after the publication of the results for the fourth quarter of 2021, Amazon offers the opposite scenario. So after Thursday night’s close of trading in New York, Amazon’s stock price soared from $2,777 to $3,207. A rise in the course allows the group to increase its valuation by nearly … 200 billion dollars. What Meta lost, Amazon just got back.

An increase in the share price remains largely to be qualified, the title having experienced a week marked by the decline. A decline largely caused by the general decline in technology stocks. And so indirectly through poor Meta results. This Friday, when the New York Stock Exchange reopens, the stock should move close to its level of Tuesday, February 2.

Diversification Welcomed By The Markets

As with Meta, it was the publication of figures and expectations that affected the price of the asset. In the case of Amazon, it would seem that it is the group’s net profit that has caught the most market attention. With an amount of 14.3 billion dollars in Q4 2021, an increase of 100% over one year. It should be noted that this net profit was largely impacted by Amazon’s participation in the Rivian company, a specialist in 100% electric vehicles.

For the last quarter of 2021, the company led by Jeff Bezos posted sales of $137.4 billion, up 9% year-on-year. An amount roughly in line with analysts’ forecasts, which had forecast $137.7 billion. In detail, Amazon’s cloud segment experienced an explosion in its quarterly turnover: + 40% over one year to 17.8 billion dollars. That is beyond forecasts and market expectations (17.3 billion).

Over this quarter, the group’s advertising revenues are also up very sharply: + 32% for nearly 10 billion dollars. In this segment and for Q4 2021, Amazon overtakes Youtube. It would therefore seem that the markets have greatly valued the diversification of the group’s income. As Deren Baker, managing director at Edge by Ascendance, a market analysis firm, suggests:

Amazon has become a real platform, since more than 50% of its income now comes from activities other than e-commerce, such as cloud computing and advertising.

Amazon Prime Subscription Will Increase

The Amazon group has also announced that the subscription to Amazon Prime will increase. A measure deemed necessary by the markets to compensate for the increase in certain costs (delivery and wage increases). This is a first for 4 years in the country of Uncle Sam. Thus, the monthly subscription rate will increase from 12.99 to 14.99 dollars. Annual membership sees its price rise from 119 to 139 dollars.

For the current quarter (Q1 2022), the group has announced revenue forecasts of between 112 and 117 billion dollars. Figures lower than market forecasts which were counting on 120 to 121 billion. Regarding the operating profit forecast, Amazon’s figures are in line with those of analysts: close to 6 billion dollars for Q1 2022.

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