Amazon (AMZN) stock is the best Dow Jones stock Friday after the world's largest e-commerce company beat top- and bottom-line expectations for its third quarter.
In the three months ended September 30, Amazon's revenue increased 11% year over year to $158.9 billion, boosted by 19.1% growth in its Amazon Web Services (AWS) cloud segment to $27.5 billion and an 18.8% rise in Advertising sales to $14.3 billion. Its earnings per share (EPS) were up 52.1% from the year-ago period to $1.43.
"As we get into the holiday season, we're excited about what we have in store for customers," said Amazon CEO Andy Jassy in a statement. "We kicked off the holiday season with our biggest-ever Prime Big Deal Days and the launch of an all-new Kindle lineup that is significantly outperforming our expectations."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The executive added that there's a lot in the hopper for Amazon, too, including its NFL Black Friday game and Election Day coverage with Brian Williams on Prime Video. Jassy also said the company has 100 new cloud infrastructure and artificial intelligence (AI) capabilities that will be revealed at Amazon's AWS re:Invent the week after Thanksgiving.
The headline results beat analysts' expectations. Wall Street was anticipating total revenue of $157.2 billion and earnings of $1.14 per share, according to CNBC. Meanwhile, advertising matched expectations of $14.3 billion and AWS revenue came up just shy of the $27.5 billion estimate.
For the fourth quarter, Amazon said it expects to achieve revenue in the range of $181.5 billion to $188.5 billion, representing growth of 7% to 11% from the year-ago period. The midpoint of this range, $185 billion, is slightly below analysts forecast for Q4 revenue of $186.2 billion.
Is Amazon stock a buy, sell or hold?
Wall Street is bullish on the Magnificent 7 stock and for good reason. Amazon is up 31% for the year to date, easily outperforming the S&P 500's 21% gain.
According to S&P Global Market Intelligence, the average analyst target price for the consumer discretionary stock is $227.86, representing implied upside of more than 14% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial services firm Stifel is one of the more bullish outfits on AMZN stock with a Buy rating and $245 price target.
"Amazon is one of the primary beneficiaries of Covid given accelerated e-commerce sales growth and Prime membership adoption, as well as the digital transformation that will accelerate cloud services adoption, which we expect to see over a longer time frame," says Stifel analyst Mark Kelley.
And as a leader in these two rapidly growing industries, "we believe Amazon remains well positioned in a recovery scenario given cloud services, marketing services and certain e-commerce categories and geographies are still in the early phases of development."
Related Content
-
Investing Freebies: Perks You Get for Owning These StocksWhile the biggest investing returns come over the long term, these companies offer instant gratification for investors with several freebies and perks.
-
Choose a Beneficiary for Your Estate Plan: It's Not 'Duck, Duck, Goose'Choosing a beneficiary for your 401(k), insurance policy or similar assets is crucial for estate planning. Here is how to do it, and six pitfalls to avoid.
-
Investing Freebies: Perks You Get for Owning These Stocks
While the biggest investing returns come over the long term, these companies offer instant gratification for investors with several freebies and perks.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
