Amazon Spikes on Surprise Quarterly Profit; Strong AWS Sales

The shares traded as low as Dollars 284 last October, virtually half of the price reached in after-hours trade on Thursday.

Overall shares of the company skyrocketed to $566.02 during after-hours trade, and if its stock levels stay the same till Friday, its market value will eventually exceed the $233.52 billion value of Wal-Mart.

Seattle-based Amazon, which last reported a profit in the 2014 fourth quarter, has often faced worries by investors that its heavy spending on new ventures will not actually pay off.

“They are showing investors that if they want to deliver profits, they can”, said Michael Pachter, an analyst at Wedbush Securities Inc., who has the equivalent of a buy rating on the stock.

Inc. posted its second quarter financial results late on Thursday, and the news was met with rather more applause than its lackluster Prime Day effort last week.

Revenue rose 19.9 percent to $23.19 billion.

Amazon shares have climbed 55 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased 2 percent. “That, along with the surprise profit beat, is icing on the cake, so to speak”.

Amazon.com swung to an unexpected quarterly profit on higher sales in North America, its popular Prime subscription service and growing demand for its Web services sending the online retailer’s shares up more than 17 per cent. Excluding the $1.39 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 27% compared to second quarter 2014.

Amazon considers Amazon Web Services a core engine of growth, along with Amazon Prime and Marketplace, where the company acts as a middleman for third-party vendors. For good measure, Amazon’s market cap also pulled ahead of JPMorgan’s ($258 billion), leaving it just as valuable as General Electric. The results surpassed Wall Street expectations.

NEW YORK (AP) — It’s official: Amazon is bigger than Wal-Mart.

Bloomberg reported that Amazon’s shares rose by 19 percent to $573.45 in aftermarket trading.

Amazon also predicted sales to rise between 13% and 24% in the third quarter, far surpassing expectations.

“We’ve been in competition with a few of the biggest names in retail”, Olsavsky said, “so we’re used to competition but we’re focused on the customer”.