After Amazon (AMZN) posted quarterly results, the stock fell to as low as ~$98 the next day before
closing at $103.41. Shopify (SHOP) also reported results that week that pleased investors. What does
Amazon’s e-commerce sales outlook mean for the company and Shopify?
Amazon posted net sales of $127.1 billion and earnings per share of 28 cents. Its operating income fell to
$2.5 billion. The firm expects revenue of $140 billion to $148 billion. Analysts expected $155.37 billion.
Furthermore, the firm set an operating income target of $0 to $4 billion.
Amazon’s growth is not keeping up with inflation. Customers have lower disposable income. They are
cutting their net spending on the online platform. Having already maximized its supply chain, Amazon
has limited room to increase its operating efficiency.
Shopify rose from below $29 to $34 after reporting revenue growth of 22.3% Y/Y to $1.37 billion. It lost
two cents a share (non-GAAP). The e-commerce platform, which caters to small businesses, is expected
gross merchandise volume growth in Q4. While Deliverr will dilute profits, Shopify benefits from
favourable the higher mix of merchant solutions in the results.
SHOP stock potentially bottomed from here. Amazon has room to fall as investors shun expensive stocks.
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