Amazon Stock Soars Amid Big Tech Race, Cost Cut Review Report
Amazon (AMZN) – Get a free report Stocks edged higher on Thursday amid a broader rally in major tech stocks and a report from the Wall Street Journal suggesting the online retailer is looking to phase out some of its business. its loss business.
The magazine reported that Amazon, the first public company in history to lose more than $1 trillion in market value earlier this week, will be a cost-cutting review by CEO Andy Jazzy in the coming months, focusing on the voice-enabled Alexa enterprise, has about 10,000 employees.
Late last month, Amazon issued a disappointing holiday turnover forecast and revealed slowing growth in its lucrative Web Services business, both tarnishing a better-than-expected third-quarter earnings report.
Amazon skipped Street’s forecast for both holiday quarter earnings, which it saw in the $0 to $4 billion region, as well as sales, pegged between $40 billion and $148 billion. For the three months ended September, Amazon reported profit of $2.9 billion, or 28 cents per share, while revenue grew 14.7% year-over-year to $127.1 billion.
Jazzy told investors at the time that while he was “encouraged” by the Q3 progress, “we recognize that there is still plenty of room to continue to improve productivity and drive performance.” cost-effectiveness throughout our network.”
“We have identified initiatives on which teams continue to work hard, and we expect to see further improvement in the coming quarters,” he added.
Chief Financial Officer Brian Olsavksy said Amazon will “as we have at similar times in history … tighten our belts, including halting hiring in certain businesses and cut back on products and services where we believe our resources are better used elsewhere.”
Amazon shares were 13.4% higher in early Thursday trading to change hands at $97.26 per share, a move that would cut the stock’s six-month decline to about 10, 4%.
Amazon announced late September pay hikes for warehouse and shipping workers just days after it was added another ‘mini Prime day’ event in October to capture demand from Prime members-focused and value-focused consumers.
Amazon says employees will earn $16 to $26 per hour, with average starting wages rising $1, to $19 per hour, as it prepares for the peak of the holiday retail season.
Amazon, one of the largest private employers in the United States, says a pay raise will cost about $1 billion next year.
“While we believe investors have anticipated a decline due to the growing international and growing macro challenges Depression JMP Securities analyst Nicholas Jones, who carries a ‘better market’ rating and $140 price target on the stock. .
“Overall, while all of Amazon’s business units are likely to be subject to greater macro pressures, we do not view 3-quarter results or 4-quarter guidance as a turning point,” he said. more. “We see Amazon as a best-in-class internet business that can not only weather the macro storm, but emerge poised to spur growth again.”