The second quarter earnings for online retailing giant Amazon (NASDAQ:AMZN) offered a major shock to investors and to analysts as well. Now, as the market digests the surprising numbers, it’s responding in a big way, sending Amazon up over 10% in Friday afternoon’s trading.
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The numbers by themselves were impressive. Amazon brought in earnings of $0.65 per share, which flattened analyst expectations of $0.35. Revenue, meanwhile, hit $134.3 billion, which again surpassed analyst expectations of $131.34 billion. That $134.3 billion represented a 10.8% improvement over the same time last year, which showed a lot more people shopping with Amazon. Driving those gains were improvements in margins, cutbacks in expenses, and improved operational efficiencies.
One of the biggest gains that caught a lot of analyst attention, though, was Amazon’s improvement in Amazon Web Services (AWS). Not only did it improve, but it too beat expectations. Analysts were looking for AWS revenue to come in at $21.74 billion. AWS actually pulled in a hefty $22.14 billion. This led Monness, Crespi, Hardt analyst Brian White to declare AWS a “more stable” operation than it’s been in a long time and noted that growth as well was stabilizing. In fact, several analysts came out to reiterate Buy ratings on Amazon stock, citing its diversification, its cloud exposure, its artificial intelligence developments, and more.
Analysts, of course, are already pretty thoroughly on Amazon’s side, to begin with. With 36 Buy ratings and one Hold, Amazon stock is considered a Strong Buy by analyst consensus. Further, with an average price target of $168.58, Amazon stock also comes with an 18.39% upside potential.
