Amazon (AMZN), Meta (FB) epic gain, loss – case of want and necessity?

February 06, 2022 02:40 PM AEDT | By Sanjeeb Baruah
 Amazon (AMZN), Meta (FB) epic gain, loss – case of want and necessity?
Image source: whiteMocca, Shutterstock

Highlights

  • Amazon Inc (AMZN) closed the week with its biggest single-day gain of US$191 billion.

  • Meta Inc’s (FB) stock rout wiped out more than US$250 billion in market value.

  • PetroChina Co holds the record for daily gain at US$597 billion logged in November 2007.

Last week saw an unprecedented turn of events in the US stock market involving two of the world’s richest companies: Amazon.com.in (AMZN) and Meta Platforms, Inc. (FB). While the former saw the biggest single-day gain, the latter saw the biggest single-day loss in US stock history.

Following Meta Inc’s (FB) stock rout on Wednesday, which robbed the company of more than US$250 billion in market value, Amazon Inc (AMZN) closed the week with its biggest single-day gain of US$191 billion as the stock rallied 14%, its biggest daily value surge.

Amazon’s record-breaking feat comes a day after reporting its robust fourth-quarter earnings. The gains surpassed Apple Inc’s (AAPL) single-day jump of US$179 billion after the earnings report on Jan 28.

Globally, however, according to Bloomberg, PetroChina Co holds the record for daily gain at US$597 billion recorded in November 2007.

After the dramatic developments, investors moved quickly to draw distinctions about the prospects of growth stocks as they reevaluated the impact of higher interest rates on shares.

So, could this be a case of necessity and wants?

Lately, tech companies whose services are seen as staples have earned more faith from investors than in those whose services are seen as discretionary, said a Wall Street analyst, cited by Wall Street Journal.

Comerica analyst John Lynch added that the market would see “noncorrelated moves” in a rising rate situation. Another expert at Synovus told WSJ that Amazon’s earnings report came as a relief because the pandemic had made it much more difficult for stock comparisons.

Both Meta Platforms, Inc (FB) and Amazon.com, Inc (AMZN) stocks have risen so fast in recent years that any major change can rattle the broader market.

However, most observers are optimistic about Meta Inc’s recovery because of its product strength, big investments in projects and skills to navigate from a crisis.

Also Read: Snap Inc (NYSE:SNAP) nixes iPhone privacy fears - answer to Meta woes?

Meta’s (FB) loss is Amazon’s (AMZN) gain – case of want and necessity?

Source: Pixabay

Also Read: Why Spotify Technology (NYSE:SPOT) stock slumped after strong earnings?

Amazon handled labor, supply costs better

The Seattle-based Amazon reported strong sales in its cloud business and raised the subscription fee for Prime membership. The impact of increasing logistics costs on profit had earlier overshadowed sales forecasts. The results showed the company could control labor and supply costs better.

The company’s net sales increased by 9% to US$137.4 billion YoY in the quarter, and the net income doubled to US$14.3 billion from a year earlier, aided by a pre-tax gain from its Rivian stake. It also saw strong growth in its advertising businesses.

Amazon’s shares had declined by 7.8%, its worst day since March 2020, a day after Meta Inc stock nosedived, raising concerns about the performance of the broader tech industry. Thursday’s decline had robbed of US$110 billion in market value for the company.

Amazon is the fourth-biggest company in the US by market value after Apple, Microsoft, and Alphabet, jointly valued at about US$1.6 trillion. Meta Inc is the No seven spot even after Thursday’s decline.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.