After finally revealing just how much money it was making off its cloud-computing business, Amazon was rewarded with record-high share prices, which made the company’s market capitalization increase by more than $27 billion to a whopping $200 billion. Despite how the company posted yet another loss on rising sales, investors were still impressed by the fact that Amazon Web Services was not only profitable, but operated on a 17% margin.
Amazon.com shares hit an all-time high Friday as investors rewarded the e-commerce giant for showing a surprise profit at its cloud-computing business and strong retail sales in North America. A series of analyst upgrades led the Seattle retailer’s shares to jump as much as 16% in early market trading, pushing Amazon’s market capitalization up some $27 billion to more than $200 billion. The shares were recently trading up 14.5% to $56.46. No matter that Amazon posted another loss on rising sales. It’s the company’s revelation that its Amazon Web Services cloud unit turned an operating profit — and a 17% margin — that impressed analysts and investors, many of which were convinced it was still in the red. Cloud computing requires heavy investment in data centers to enable companies to store and retrieve vast amounts of information. For the first time, Amazon disclosed AWS sales, which jumped 49% to $1.57 billion with operating income of $265 million. Meanwhile, Amazon’s core North American market boosted sales 24% to $13.4 billion in the quarter.
