Amazon (NASDAQ:AMZN) revealed that its third quarter profits fell year-over-year late last month. The e-commerce giant has increased spending on its next-day delivery service, which weighed on earnings. Founder and CEO Jeff Bezos said that the investment was the right long-term play.
Shares of Amazon have still climbed 3.7% over the past month as of close on November 4. The stock is up 20% in 2019 so far. Net sales at Amazon still rose 24% year-over-year to $70 billion which beat analyst expectations. Amazon Web Services accounted for 13% of its total revenue at $9 billion.
Last week Amazon received more bad news as Microsoft won the gigantic $10 billion Department of Defence “JEDI” Contract. Legal experts believe that Amazon is likely to challenge the winning bid due to alleged interference by the Trump administration. President Donald Trump has had an open-air feud with the company and the Bezos-owned Washington Post since his win in 2016. As of this writing, Amazon has yet to make any public statements as it pertains to a legal challenge.
Amazon boasts a beefy price-to-earnings ratio and price-to-book value, but investors are paying a premium for its top shelf growth. The loss of the JEDI contract is a big win for Microsoft and a setback for Amazon, but its cloud storage business remains a sector leader. I still like Amazon stock ahead of the holiday season.
