✔️ Amazon: Amazer or Amazest?

Bezos is out, Google posts a blowout quarter

Hey Global Investor, here’s what you need to know before the US markets open.

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Amazon: Amazer or Amazest?

Even made up superlatives don’t do justice to what Amazon has accomplished in 2020. In arguably the toughest year in more than a generation where the world shut down due to a raging pandemic, Amazon has delivered items to households, and in doing so, delivered outstanding results across all of its businesses.

Background: 27 years ago, in the garage of his home, Jeff Bezos started a website to sell books online. That was when people were still wondering what the Internet was. Today, Amazon sits alongside three other household names – Google, Microsoft, and Apple – as businesses that crossed the trillion dollar mark in market cap.

In the intervening time, Amazon went from strength to strength. From books to groceries to Kindle to Amazon Prime to Amazon Web Services. Instead of depending on third party logistics providers for delivery, the company built its own distribution network. Amazon today employs 1.3M people around the world.

Were all of these developments tailormade for Amazon to deliver the goods – literally and figuratively – in 2020? It’s not an overstatement to say around the globe, people for the large part depended on Amazon deliveries to lead a “normal” lifestyle while they were stuck at home during the lockdown.

What is Happening? Given holiday shopping in 2020 pretty much shifted to online purchases of gifts, etc., it was expected that Amazon would deliver good results. What the analysts hadn’t anticipated was how Amazon would blow away even the most optimistic expectations. In doing so, the company reported its first-ever $100B revenue quarter.

Key numbers for Q4:

  • Revenue: $125.26B (Vs. $119.7B expected) and compared to $87.44B Y-o-Y
  • EPS: $14.09 (Vs. $7.34 expected)

In retail, Amazon declared the 2020 holiday season was its biggest yet. In technology, AWS grew quarterly sales by $12.74B, up 28%, with the division’s operating income growing to $3.6B, up 37%. With these chart-busting numbers, can Amazon continue this level of performance in the post-Covid world? Is Amazon’s leadership ready to transform the company further?

As if on cue, Jeff Bezos announced he will make way to Andy Jassy, CEO of AWS in Q3. With Jassy seen as being cast in the same mold as Bezos, the market certainly thinks the leadership transition can’t get any smoother.

Market Reaction: On Tuesday, AMZN closed at $3,380, up 1.11%. After the leadership transition announcement and Q4 results, the stock is up 2.43% before hours.

Company Snapshot 📈

AMZN $3,380.0 +37.12 (1.11%)

Analyst Rating (48 Ratings) BUY 94%  HOLD 6%  SELL 0%

Newsworthy 📰

Bland: Chipotle’s Covid-19 Costs Weigh on Its Profit (CMG -2.83% pre-market)

WSB: GameStop, other Reddit-favored stocks plunge as trading frenzy fizzles (GME -60.01%)

Bounce: Alphabet Shares Jump on Ad Revenue Gains in Holiday Quarter (GOOG  +7.24% pre-market)

Recall: Tesla recalls roughly 135,000 vehicles (TSLA +3.93%)

Later Today 🕒

  • After Market Close: PayPal Holdings Inc Earnings (PYPL)
  • After Market Close: Qualcomm Inc Earnings (QCOM)
  • Before Market Open: Coty Inc Earnings(COTY)
  • After Market Close: eBay Inc Earnings (EBAY)
  • After Market Close: GrubHub Inc Earnings (GRUB)
  • 6:45 PM IST: ADP employment report
  • 8:30 PM IST: ISM services index

Fun Fact of The Day 🌞

We shake hands to show we’re unarmed

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