Amazon Stock Surges in 2024

By Douglas A. McIntyre Published Feb 13, 7:15AM EST

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Amazon Stock Surges in 2024 — © kasinv / iStock Editorial via Getty Images

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 | AMZN Price Prediction) 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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.