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Amazon's fourth quarter earnings were published last Thursday night, and they were very well received. Despite being a really big company already, they delivered tremendous growth. Amazon is now trading 16% higher than just before the numbers hit the news wires.
Here are the top five points about the report.
(1). Group profits almost doubled from last year thanks to strong festive season sales, the booming AWS cloud business, and the stake in the electric-vehicle maker Rivian.
(2). Amazon are raising the price of the Prime subscription for the first time since 2018, to $139 a year from $119. That's great for future profits.
(3). They have doubled the total number of employees since the start of 2020, from nearly 800 000 to more than 1.6 million today. That's just incredible.
(4). They disclosed the size of their advertising unit for the first time. It raked in $31 billion in revenue last year, mostly from online sellers paying to be profiled high-up on product searches. Huge!
(5). Amazon spent $61 billion last year on new warehouses, fleets of trucks and planes, cloud networks and more. According to one report I saw, that's double the capex of oil giants Exxon Mobil, Chevron, and ConocoPhillips combined.
Ten years ago, Amazon was a mid-cap stock that we added to portfolios for a bit of a "side flutter". We thought of them as one of our "riskier bets" or "future heroes". That worked out well. Now it's a core holding, which should be in every investor's portfolio.
