Amazon poised for biggest-ever market value gain day after Facebook's record loss

The e-commerce giant is poised to add nearly $268.8 billion in market value, the biggest single-day gain in US stock market history. PHOTO: REUTERS

SAN FRANCISCO (BLOOMBERG) - Amazon.com is giving the market back what Facebook parent Meta Platforms just took away - or at least some of it.

The e-commerce giant is poised to add nearly US$200 billion (S$268.8 billion) in market value if the stock's 14 per cent gain in after-hours trading on Thursday (Feb 3) following the company's fourth-quarter earnings report holds to Friday's close.

That what would be the biggest single-day gain in United States stock market history coming just a day after Meta entered the other end of the record book with a US$251 billion wipe-out.

The surge in Amazon's stock price came after sales in its cloud computing business beat Wall Street estimates and the company raised the price of Amazon Prime subscriptions, alleviating some concerns about the impact of cost increases on profitability. Those elements overshadowed forecasts for sales and operating profit in the current quarter that fell short of expectations.

Amazon's gains come after the stock suffered its worst day since March 2020, as Meta's earnings flop raised fears about Big Tech's financial results. The 7.8 per cent decline in Thursday's regular session wiped out US$119 billion in market value for Amazon.

Apple set the current record for added market value last week after it gained about US$179 billion on the day after its earnings report.

A US$200 billion gain for Amazon would be bigger than the market values of more than 90 per cent of the companies in the S&P 500 Index, according to data compiled by Bloomberg.

While history will no doubt remember this earnings season for Meta's 26 per cent collapse, its plunge was an outlier among the biggest of big tech - in terms of direction, anyway. The FAANG cohort's other constituents - Amazon, Apple, Netflix and Google parent Alphabet - all posted sizeable post-result swings, and all of them were gains.

"Facebook is clearly not representative of what's going on in the broad market, where earnings are still strongly beating expectations and forward forecasts for revenue growth still rising," said Ms Gina Martin Adams of Bloomberg Intelligence.

"It also confirms a breakup of the concept of FAANG as a theme in general," she added. "Clearly, these are companies with very different business models and that shows in earnings results this season."

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