Amazon shares surged by 7% following the e-commerce giant’s report of higher-than-expected holiday quarter sales and positive signals from its lucrative cloud business, indicating early gains from AI-powered features.
The company, alongside tech peers like Microsoft, is starting to see the returns on substantial AI investments, despite planning further spending in 2024 for tech development. With a 14% rise in holiday quarter sales, Amazon showcased robust spending amidst economic challenges, leading to at least 23 brokerages raising their price targets on the stock.
The stock’s forward earnings per share ratio was at 40.51, compared to Microsoft’s 31.57 and Walmart’s 23.75, reflecting investor confidence. Amazon’s market capitalization is expected to increase by around $120 billion if the gains persist, despite significant investments in building cloud infrastructure for the rapid adoption of generative AI technology.
Source: Reuters
