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· Posted on
February 21, 2024

Amazon lost 2 billion bucks this quarter, yet shares are still soaring

Amazon's sales declined more than twice as much as expected, but luckily it has many revenue streams.

What's the key learning?

  • Amazon's online store sales declined more than twice as much as investors expected - the second quarterly loss in a row and one of the company's slowest growth periods
  • The company has many revenue streams to diversify its revenue
  • Diversification allows investors to reduce risk by reducing the exposure to a particular asset

👉 Background: Amazon lost a casual US$2 billion in this quarter... But investors were expecting a lot worse... And the company's shares actually spiked on this kinda good earnings news.

👉 What happened: So, what performed well? Amazon Web Services was up 33% from last year. But Amazon’s online store sales declined more than twice as much as investors expected.

👉 What else: It’s the second quarterly loss in a row and one of the slowest growth periods for Amazon in history. But luckily for Amazon, it has so many revenue streams to diversify its revenue.

What's the key learning?

💡 Diversification allows investors to reduce risk by reducing the exposure to a particular asset... or in Amazon's case, a particular revenue stream.

💡Amazon is actually a single business with several multibillion-dollar businesses within it. That diversification means it doesn’t have to rely on a single revenue stream for its success.

💡So when Amazon’s online store sales decline, it thankfully has other revenue streams to prop it up. The big question is: when does this become too big that Amazon can’t do anything well anymore?

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