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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?
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.
