Amazon Shares Surge 5% After Strong Q3 Earnings Report
Amazon’s market cap is expected to surge after the online retail giant’s third-quarter earnings exceeded Wall Street’s expectations. In premarket trading on Friday, Amazon shares climbed 5%, reaching above $126. If these gains hold until the closing bell, Amazon’s value will increase by approximately $60 billion, bringing its market cap to $1.3 trillion.
The surge in stock price followed the release of Amazon’s earnings report for the three months ending September 30. The company reported earnings of 94 cents per share and revenues of $143 billion, both surpassing analysts’ forecasts. Sales for Amazon Web Services (AWS), its cloud computing division, also rose 12%, in line with expectations.
Analysts believe that AWS’s second consecutive quarter of growth contributed to the stock-price surge. Wall Street’s focus on artificial intelligence and the cloud had different impacts on Microsoft and Alphabet shares this week. Hargreaves Lansdown’s Sophie Lund-Yates stated that “Amazon results were always going to be about the cloud,” emphasizing the significance of AWS for Amazon’s bottom line compared to other tech companies.
Like other mega-cap tech companies in the “Magnificent Seven” group, Amazon shares have rallied this year, with a year-to-date increase of 42% as of Thursday’s close.