Amazon Stock Surges Ahead Of Q4 Earnings
Amazon stock has surged once again, as investors eagerly await Amazon’s earnings announcement Thursday afternoon.
According to Business Insider, Amazon share prices were up around 8 percent during afternoon trading on Thursday, while the rest of the market did not see such substantial gains. This comes as a welcome change for Amazon stock investors, as the stock saw roughly a 10 percent drop in share price during January.
Although the exact reason for the stock fluctuation isn’t clear, it’s likely due to investor speculation that Amazon will have a positive earnings announcement. Analysts are predicting the Amazon earnings announcement to beat their expectations.
“I’m expecting to hear very strong result. By all accounts, we think Q4 was Amazon’s best holiday season ever on any number of metrics,” said Tuna Amobi of S&P Capital IQ.
The Amazon earnings call is an announcement of their fourth quarter earnings in 2015. Amazon reported a positive holiday sales season, and, in fact, had one of the most positive growth stories of all retailers in 2015.
According to CNBC, Amazon stock was the best performing stock in the S&P 500 during 2015.
Anthony Rodio, chairman of Storefront, explained their success by saying, “Amazon is relentless in taking cost out for the consumer and relentless in that you can find anything you ever want on Amazon. Traditional retail still thinks about how to sell inventory in their warehouse, not about what the consumer wants.”
Meanwhile, Profit Confidential attributes Amazon’s success in 2015 to CEO Jeff Bezos’ unique business mantra. Bezos is known for his business acumen and understanding of what a business needs to do in order to stay relevant in a changing marketplace.
The Amazon CEO has previously said, “All businesses need to be young forever. If your customer base ages with you, you’re Woolworth’s.”
Prior to coming onboard at Amazon, Bezos had a very diverse career, including print media and space exploration. He became the world’s fourth richest man in late 2015 when Amazon stock surged over 100 percent.
So what’s next for Amazon and Jeff Bezos? Whether or not the stock will continue to surge may ultimately depend on how the fourth quarter earnings report actually plays out. But many experts believe that Bezos is with Amazon for the long haul.
“He was going to be in this for the long term, which meant he was going to reinvest his profits, he was going to grow the company, he was going to have low prices to gain consumers. All of this has worked,” said Richard Brandt, author of One Click: Jeff Bezos and the Rise of Amazon.com
In addition to investors being happy with Amazon stock gains, employees also have a vested interest, as many of them still receive Amazon stock options as part of their compensation or as a bonus. Today’s surge is good news for everyone in the pro-Amazon camp.
Amazon earnings announcements are expected after the bell on Thursday, and it will be interesting to see how the stock performs in after hours trading.
[Photo by Monty Rakusen/Getty Images]
