Amazon Inc (NASDAQ:AMZN) is giving back to the market what Meta Platforms Inc (NASDAQ:FB) took from it yesterday – or at least a part. The e-commerce giant’s 14% rise in the stock market after Q4 results on Thursday added $200 billion in market value to the company —somehow close to the $251 billion Meta lost on the previous day.
Q4 2021 hedge fund letters, conferences and more
A Unique Event
Both Amazon’s and Meta’s are the largest single-day gain and loss in U.S. stock market history, respectively —separated by one day. Amazon’s share price surge came after sales from its cloud computing business beat Wall Street estimates and the company raised the price of Amazon Prime subscriptions.
Those items dwarfed forecasts for sales and operating profit in the current quarter, which fell short of expectations.
Amazon’s earnings performance arrives after its shares suffered their worst day since March 2020, as Meta’s earnings flop raised fears about big tech’s financial results.
The e-commerce juggernaut achieved a net profit of $33.3 billion in 2021, an increase of more than 56% compared to the previous year, when it recorded $21.3 billion, with numbers still propelled by the strong rise in its business during the pandemic.
Amazon sales last year stood at $469.8 billion, 21.7% more compared to the $386 billion it registered in 2020, despite global problems in supply chains underlining the skepticism of Amazon investors in recent months.
The company announced Thursday that it will raise the price of Prime subscriptions to compensate for the cost of shipping and salaries —a decision made after exceeding earnings expectations for Q4 2021.
According to analysts, it was about time to make this adjustment to the more than 200 million subscribers worldwide. Thus, the Prime membership will go from $12.99 per month to $14.99 —this change will apply only to new members, according to the company.
New CEO Andy Jassy faces a crucial challenge: keeping Amazon Prime’s millions of customers happy as supply problems, labor shortages, and rising freight and shipping costs escalate all over the world.
Amazon and Meta are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.