Why Amazon shares jumped $60 to US$364 this week, and could go higher

Alex PollakPress

Amazon vs Telstra

The market bid up Amazon 20% on the decision by Amazon to break out the numbers behind Amazon Web Services (AWS) its cloud-based web hosting business. AWS formed a major part of the 40% revenue increase in the “other revenue” line in the 10k filing, which was US$1.74b in the quarter. The market thought AWS was worth $28b (US$60/share) with similar numbers published by the better brokers including Piper Jaffray. Some of the less informed speculation prattled on about upgrading on higher than expected EPS (irrelevant in a company expensing its development costs) but the figures speak for themselves – the filing reveals that AWS could be on track to be 10% (US$6b or more) of total revenue, at which level the SEC demands disclosure as a separate business unit on the basis of materiality. The 20% jump looks like an opening price, while the market digests the news – AWS is already a very significant player with corporate clients like Netflix, Mashable etc.

Disclosure – Loftus Peak clients own Amazon shares

We invest in global change.

Google, one of the top ten listed US stocks, did not exist ten years ago.

Share this Post

Want to read more?

Disruption is changing the face of investment. To receive monthly performance updates and more content like this from Loftus Peak, fill in your name and email address. You can unsubscribe at any time.

Do not show again.