Amazon has never been so strong. Since it has reached more than $3,000 per share earlier this year, the company has shown the world the power of the online marketplace.
From grocery shopping to physical shopping with Whole Foods, consumers from all around the world have been heavily relying on Amazon to get basic supplies during – and after – the lockdown amid COVID-19.
Amazon shares have received green lights from all investors: its stocks doubled their values since last December and it also has received all green lights on mid and long-term investment. Here is why.
Amazon, an “essential business”?
For about three months, most of the western population was sheltering at home, being locked in their house or apartment.
As a result, unexpected profits have emerged from Amazon: its revenue went up 40% to $88.9 billion, net income of $5.2 billion, and earnings per share of $10.30 (compared to revenue of $63.4 billion, net income of $2.6 billion, and earnings per share of $5.22 in Q2 2019”, explains VentureBeat.
Sales in Northern America jumped by 43% to $55.4 billion, while international sales soared 38% to $22.7 billion.
According to Amazon, more than 4 billion dollars are due to shopping related to the coronavirus – which makes it look like Amazon has become an unexpected “essential business” to many.
An ever-increasing share
Back on 3 December 2019 Amazon shares were worth $1,676. Its value has now doubled since, trading now at $3,167.
According to Yahoo Finance, Amazon is part of the top 5 of the five shares to watch closely and invest in.
Investors.com explain that Amazon is a great share to buy since the company provides cloud services – that are essential for people working from home and students learning from home – as well as consumers, who are thriving to shop online in order to maintain their safety.
“The online retailer earned $10.30 per share, obliterating expectations for $1.48. It logged $88.9 billion in sales, a 40% jump that also came in above Wall Street’s forecasts for $81.4 billion“, adds the website.
Read on Alvexo: “Are Consumer Behavior Changes a Good Thing?”
Amazon Web Services on the rise
Last but not least, AWS – Amazon Web Services – is increasing too.
“AWS’s top line increased 29% to $10.8 billion, while operating income in the segment jumped 58% to $3.4 billion. AWS remains the company’s biggest source of profit, and a high-margin business that should continue to lift the company’s overall profit margin over time”, analyses the Motley Fool.
During its call with analysts, Amazon shared a projection of revenue growth of 24%-33 by the end of this year, with the third quarter expected to have a $5 billion operating profit.
The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.