what happened
shares of Amazon (AMZN 6.60%) It surged last month as it rode a broader recovery in tech stocks and made a number of management announcements that seem to position the company for a return to profitable growth.
Stocks rose 23% in January, according to data from S&P Global Market Intelligence.
Image source: Amazon.
So what
with Nasdaq Broader tailwinds in the market were a big reason for Amazon’s rise, after rising 11% last month. Inflation continues to cool and investors expect the Federal Reserve to continue slowing rate hikes, which it did on 1 February, raising the Fed Funds rate by just 25 basis points. As a cyclical business that trades at high valuations, Amazon would benefit from a slowdown in rate hikes and the economy avoiding a major recession.
As for the company itself, there has been some news that seems to have boosted the stock price. First, Amazon said it would expand the layoffs it announced in November from 10,000 to 18,000. Layoffs mean real people lose their jobs, but they often lead to higher stock prices because they show companies are keeping costs down.
Amazon also announced the launch of its Buy With Prime program to eligible sellers in the United States. The Buy With Prime program allows online retailers on non-Amazon platforms to list the Prime badge and offer free shipping and returns to Prime members. The move could dramatically expand the addressable market for Amazon’s logistics services and make a big difference to its bottom line.
Finally, the company also announced the addition of a pharmacy perk called RxPass to Prime. This allows customers to receive generic generic drugs for a flat monthly fee of $5.
Both Buy with Prime and RxPass show that Amazon continues to expand its ecosystem while cutting costs through layoffs and other moves.
So
Amazon’s fourth-quarter earnings report closes after hours on Thursday, and investors seem to think the stock will skyrocket afterward. meta platform did the same following yesterday’s earnings call. Analysts expect top-line growth of just 6% and earnings to fall sharply, which could lower the hurdles for the company to overcome, but it also points to the challenges facing Amazon. increase.
In today’s rally, the stock is up about 40% from its low in December last year, marking a dramatic shift in sentiment for Amazon stock. For stocks to continue to rise, fundamentals need to improve.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randy Zuckerberg, former director of market development and spokeswoman for Facebook and sister to his CEO of his platform, Mark Zuckerberg, is a member of the Motley Fool’s board of directors. Jeremy Bowman has held positions at Amazon.com and Meta Platform. The Motley Fool has positions on and endorses Amazon.com and the Meta platform. The Motley Fool’s U.S. headquarters has a disclosure policy.
