On Thursday, tech giant Amazon.com, Inc. (NASDAQ:AMZN) reported strong top and bottom line numbers on strength from improving fundamentals across most of the company's core business lines.
Amazon's bottom line improved marginally year over year, however the company's net income of $256 million was near the higher end of the guidance range provided by management, leading analysts to upgrade expectations of future earnings moving forward for the e-commerce giant. Amazon's operating income also came in significantly higher than expected at $347 million, a welcome surprise for investors expecting a much lower number due to significant investment initiatives typical for Amazon during the third quarter.
Amazon's top line growth, perhaps the driver of the vast majority of the increase in AMZN's stock price on Friday, was particularly notable. Year over year, Amazon has grown its revenue by 34% - a staggering number, given the size and scale of Amazon compared to its smaller competitors. A year over year growth rate of 34% is also notable due to the fact that Amazon grew by a "meager" 25% in the second quarter, meaning top line growth has accelerated during the second half of this year. The Whole Foods purchase indeed contributed a large chunk to the increase, however the vast majority of the company's revenue gains continue to come from organic growth among the company's e-commerce business.
With extremely profitable business segments such as Amazon Web Services driving profitability, the ability of Amazon to continue to invest in new business lines makes this company a hard one to bet against, despite its heightened valuation.
Invest wisely, my friends.
