Amazon’s stocks surge on strong revenue and guidance

Shares of Amazon.com Inc. significantly stepped higher on Friday’s pre-market trading session after issuing a quarterly revenue beat and rosy guidance.

The e-commerce giant skyrocketed 11.88% or 14.53 points to $136.81 per share. The upturn also trailed an increase of 1.08% or 1.31 points to $122.28 apiece.

The company reported revenue growth of 7.00% to $121.23 billion in the fiscal second quarter. This latest result surpassed the analysts’ consensus of $119.09 billion.

Subsequently, Amazon Web Services pinned sales of  $19.70 billion, way higher than the $19.56 billion expected. At the same time, the advertising segment grew to $8.76 billion, outstripping the $8.65 billion estimate.

Accordingly, this uptrend bucked the trend among its Big Tech peers, which all reported disappointing results prior to Thursday. Meanwhile, Apple, along with the online retailer, beat expectations.

In line with the positive earnings, Amazon expects to post third-quarter revenue between $125.00 billion and $130.00 billion. This forecast represented growth of 13.00% to 17.00%, higher than the average market expectation of $126.40 billion.

Remarkably, the Washington-based firm successfully gained a foothold against the widespread inflationary pressures. However, Amazon shaved its headcount by 99,000 people to 1.52 million employees in the second quarter. This move came after its pandemic-driven expansion left the company with too many workers and warehouse capacity.

Amazon lost $3.9B on Rivian investment

Despite the positive results, it is notable that Amazon incurred a $3.90 billion loss on its Rivian investment. The downturn came after shares of the electric vehicle maker plunged 49.00% in the second quarter. Correspondingly, that brings its total loss on the funding this year to $11.50 billion.

Moreover, the write-down dragged the technology company with an overall loss of $2.00 billion in the quarter.

Furthermore, Amazon’s core e-commerce business continues to suffer as online sales ease from the pandemic hype. As a result, the firm’s online stores segment declined 4.00% year over year. Regardless, physical store revenue continued to rebound from the year-ago period, edging up 12.00%.