After reporting their second quarter earnings of $23.2 billion, a trading frenzy began which has resulted in Amazon adding about $40 billion in market value, making it now worth more than Wal-Mart.
While analysts were expecting around $22.4 billion in sales from Amazon’s 2nd quarter, they also reported a $92 million profit, equal to $.19 per share, while analysts were expecting a loss of $.14 per share.
The company is now trading at an all-time high of $550/share, making its value somewhere in the ballpark of about $266 billion — a $40 billion increase from before the reports were released. To put this in perspective, that means that in the brief frenzy of post-earnings trading, Amazon added more to its market capitalization than the entire value of eBay.
This puts Amazon comfortably ahead of its Chinese rival Alibaba (valued at $210 billion), and also means Amazon’s new value is nearly $32 billion more than Walmart’s, which has a market cap of a mere $234 billion.
All of this growth has occurred despite the fact that foreign currencies have weakened against the dollar recently. Amazon stated that their sales would have been $1.4 billion higher than reported if they didn’t have such a significant share of their business overseas. Their current reports still reflect a 20% increase over the same period last year.
Amazon continues to lead the industry largely due to their unique and innovative ways of handling their business. So, what is in their plans for the future? There is rumor of many new things to come… a futuristic, high-tech Kindle-like tablet supposedly in the works, production of television shows on the air, talk of launching a new online hotel booking service, and even flying drones that deliver your packages to your front door within 30 minutes or less.
One thing that is very clear is that Amazon’s CEO, Jeff Bezos, prefers to invest heavily in what might drive business tomorrow rather than reap profits today. In the company’s short 21 year existence, it has acquired dozens of smaller organizations that are from a range of industries. This leads many to ponder just what the retail giant has up it’s sleeve for the future.