Amazon.com Inc. witnessed a sustained upward trajectory in its stock on Friday, achieving its highest closing level in over two years. The e-commerce behemoth's shares saw a 2.7% increase, concluding the session at $174.45. This marked the best closing level since December 9, 2021, when Amazon's stock closed at $147.17, according to data from Dow Jones Market Data.
Last week, Amazon briefly surpassed Alphabet Inc. to become the third most valuable U.S. company by market capitalization. Although it has since slipped back to the fourth position, Amazon's recent momentum has enabled it to maintain a spot in the top four, with Nvidia Corp. closely trailing behind. As of the latest figures, Alphabet boasts a market capitalization of $1.86 trillion, Amazon follows closely at $1.81 trillion, and Nvidia stands at $1.78 trillion.
The reaction from Wall Street to this quarter's earnings from major technology companies was mixed, but Amazon's results were well-received. UBS analyst Stephen Ju expressed optimism in a note to clients, stating that the factors that previously restrained Amazon's shares, such as e-commerce deceleration in 2021, margin compression in 2022, and AWS deceleration in 2023, are expected to diminish throughout 2024.
Amazon has played a pivotal role in driving earnings growth for the S&P 500 consumer discretionary sector. Its quarterly earnings per share surged from 3 cents to $1 in the latest quarter. According to FactSet, the consumer discretionary sector is anticipated to post a remarkable 33% growth in earnings per share for the fourth quarter. However, excluding Amazon from this calculation would result in a decline of approximately 1%.
The positive momentum for Amazon underscores its resilience and strategic positioning in the market. Despite facing challenges and uncertainties, the company's ability to overcome obstacles and deliver strong financial results has resonated well with investors. The e-commerce giant's consistent performance, coupled with favorable reactions to its recent earnings, positions it as a key player in the competitive landscape.
As Amazon continues to navigate the evolving business landscape and adapt to changing market dynamics, its stock performance serves as a reflection of investor confidence. The company's strategic initiatives, combined with its strong financial fundamentals, contribute to its standing as a significant player in the technology and e-commerce sectors. Investors will likely keep a close eye on Amazon's future moves and financial performance as it navigates the complex and dynamic market conditions.
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