Amazon Stock Surges in 2024

Investing

Published: February 13, 2024 7:15 am

The S&P 500 is up 5% this year. Amazon stock is higher by 13%. That is even better than the 10% gain at Microsoft, which is considered a hot mega-cap stock because of its foray into artificial intelligence (AI).

What happened? Primarily, Amazon.com Inc. (NASDAQ: AMZN) is firing on all cylinders. It has made tactical layoffs as well, cutting costs in areas it says are weak performers. Layoffs seem to be the rule this year among tech companies, rather than an exception. Amazon cut several hundred Prime Video and MGM employees earlier this year. (Eleven reasons to avoid Amazon today.)

Two Amazon Businesses

Amazon operates two primary businesses. The first is Amazon Web Services (AWS), the world’s leader in cloud computing. AWS has 31% of the market. Microsoft is in second place with 24%. In the most recent quarter, AWS had revenue of $24.2 billion, which was up from $21.4 billion in the same quarter the year before. Operating income was $7.2 billion, up from $5.2 billion.

At its heart, Amazon remains an e-commerce company, particularly in North America. In the most recent quarter, North American revenue was $105.5 billion, up from $93.4 billion a year ago. Operating income was $6.5 billion. That compares to a loss of $240 million in the previous year. The quarterly results were particularly important, since they include the fourth-quarter holiday shopping season.

Amazon International has consistently lost money, which begs the question of why it exists at all. In the final quarter of the year, it had revenue of $40.2 billion, up from $34.4 billion. It had an operating loss of $419 million, compared to a loss of $2.2 billion the prior year.

Amazon continues to have what many believe is the largest customer retention program in the industry. Prime offers customers free second-day delivery on many items, and Amazon Prime Video reaches about 200 million subscribers. That probably puts it second in streaming subscribers in the industry, behind only Netflix.

Why has Amazon stock done well this year? Probably because a mediocre bottom line in its core business got much better.

100 Million Americans Are Missing This Crucial Retirement Tool

The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.

Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to learn how to get a quote in just a few minutes.