Menu
Blockbuster results send Amazon stock on verge of eclipsing Microsoft

Blockbuster results send Amazon stock on verge of eclipsing Microsoft

At least 13 brokerages raised price targets for Amazon after it posted record profits

Amazon.com shares surged on 2 February, pushing its stock market value above US$700 billion and threatening to eclipse Microsoft, a day after the online retailing behemoth reported blockbuster results.

Amazon's stock was up 3.7 per cent at US$1,441 per share in afternoon trade, on track for a record high close and putting its market capitalisation at US$701 billion. The stock traded as high as US$1,498.

Meanwhile, Microsoft fell 2.2 per cent to US$92.97, trimming its market capitalisation to about US$711 billion.

Apple, the world's most valuable listed company, was worth US$827 billion on Friday after reporting disappointing iPhone sales on Thursday. Its stock fell 3.7 per cent to US$161.57.

The major stock indexes fell as much as 2.1 per cent in a broad retreat.

At least 13 brokerages raised their price targets for Amazon after it posted record profits, pointing to growth potential from increasing global Prime subscriptions and a market-leading cloud business.

Analysts at Jefferies, Wedbush and Credit Suisse were the most bullish, boosting their targets to US$1,750. At that price, Amazon would be worth about US$850 billion.

Microsoft's stock has jumped 150 per cent to new highs since CEO Satya Nadella took over in 2014 and made the company a major player in cloud computing while reducing its dependence on a tepid personal computer industry.

But Microsoft has failed to keep up with Amazon shares, which have surged 73 per cent in the past 12 months.

Amazon revenue has been growing at a scorching pace as more shopping moves online and businesses shift their computing operations to the cloud, where Amazon Web Services (AWS) leads the market.

AWS, which competes with Microsoft's Azure and Alphabet’s Google Cloud platform, reported a 45 per cent jump in revenue to US$5.1 billion in the quarter.

"AWS is still adding more incremental dollars than all public cloud competitors combined," Barclays analyst Ross Sandler said.

The high-margin business, which accounts for a significant chunk of Amazon's operating profit, has been providing cash for investments and supporting the razor-thin margins in retail.

Amazon's earlier investments in warehouses have yielded results for the company as lower shipping costs boosted its quarterly operating margin to 3.5 per cent, its highest fourth-quarter margin since 2010, analysts said.

Wall Street analysts are overwhelmingly bullish on Amazon, with 46 of 50 brokerages rating it "buy" or higher, three "hold" and only one "sell." Their median price target is US$1,580.

(Reporting by Supantha Mukherjee in Bangalore and Noel Randewich in San Francisco; Additional reporting Sonam Rai in Bengaluru; Editing by Jeffrey Benkoe)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MicrosoftAppleamazon

Events

Featured

Slideshows

Channel kicks 2021 into gear as After Hours returns to Auckland

Channel kicks 2021 into gear as After Hours returns to Auckland

After Hours made a welcome return to the channel social calendar with a bumper crowd of partners, distributors and vendors descending on The Pantry at Park Hyatt in Auckland to kick-start 2021.

Channel kicks 2021 into gear as After Hours returns to Auckland
The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Show Comments