A steeper-than-expected drop in quarterly profit rattled some Amazon.com investors, but Wall Street analysts remained largely bullish about the company’s aggressive spending plans.
Shares of the e-commerce juggernaut, which have risen 40 per cent this year, were down 4.3 per cent at $1,001 in early trading on Friday, wiping out $21 billion from its market value.
The stock touched a record high on Thursday, helping CEO Jeff Bezos briefly unseat Microsoft Inc co-founder Bill Gates as the world’s richest person.
“The overall story coming out of Amazon’s second quarter print feels a lot like it did three months ago – accelerating growth, stepped-up investments, lower near-term profitability,” JP Morgan analyst Doug Anmuth said.
“But will anyone care about profit when Amazon is taking bigger chunks of market share?”
The world’s largest online retailer reported a better-than-expected rise in revenue, but operating profit came in well short of analysts’ estimate as the company continued to pump in money to expand in international markets such as India.