Amazon (AMZN) stock was up 12% in premarket trading after the e-commerce giant reported that its fourth quarter revenue increased 9%, including a $12 billion gain from its investment in electric vehicle company Rivian (RIVN).
Amazon’s stock is on pace for its biggest one-day gain since 2012 following the earnings beat.
The Seattle-based company reported earnings per share (EPS) of $5.80 U.S. compared to $3.57 U.S. that had been expected by analysts, according to Refinitiv data.
Amazon’s Q4 revenue grew 9.4% to $137.4 billion U.S. versus $137.6 billion U.S. that had been forecast by Wall Street. Amazon guided for first quarter revenue of between $112 billion U.S. and $117 billion U.S., below the average estimate of $120 billion U.S.
Even with the weaker-than-expected sales number and guidance, Amazon gave investors enough confidence that growth is recovering to send its stock higher.
The company disclosed revenue from its fast-growing advertising business for the first time. Amazon advertising services grew 32% year-over-year to $9.7 billion U.S. during the quarter. Previously, Amazon included advertising revenue in its “other” business segment.
Amazon’s big profit gain on Rivian is the result of the electric vehicle maker’s initial public offering (IPO) last November. The Rivian IPO priced at $78 U.S. a share, valuing the company at $66.5 billion U.S. The stock climbed past $172 U.S. at its peak but has since fallen back to about $60 U.S. Amazon, which invested more than $1.3 billion U.S. into Rivian, owned 22.4% of the company’s Class A shares before the IPO.
Amazon is the last of the mega-cap tech companies to report in what’s been a rollercoaster earnings season. Netflix (NFLX) kicked it off in disastrous fashion, with a miss on subscriber estimates. Apple (AAPL) and Alphabet (GOOGL) followed by cruising past estimates, all before Meta Platforms (FB) issued a big earnings miss earlier this week, sending stock markets sharply lower as a result.
Amazon also hiked the price of its Prime membership for the first time in four years. The company said it will raise the price of its annual Prime membership to $139 U.S. from $119 U.S.. The cost of the monthly Prime membership will also increase to $14.99 U.S. from $12.99 U.S. The price change will go into effect for new members on February 18, and for current members on March 26.
The company’s cloud computing business was another notable bright spot. Revenue at Amazon Web Services (AWS) in the fourth quarter climbed 40% to $17.78 billion U.S., topping Wall Street estimates.
