United Investment Limited - Amazon jumps on 'game-changing' quarter, iPhone fall hits Apple

CENTRAL, Hong Kong - Aug. 24, 2023 - PRLog -- Helping to protect the wider market from Apple's AAPL.O 1.5% drop on disappointing iPhone sales.

The results closed off a strong earnings season for most major U.S. technology companies, from Alphabet's Alphabet to Meta, owing to a rebound in the digital ad industry and improved demand for cloud services after a nearly year-long decline.

Based on premarket fluctuations, Amazon's market value was poised to rise by nearly $120 billion. Meanwhile, Apple, the most valuable company in the world, was on track to go below $3 trillion, with a $50 billion reduction in value.

Amazon's cloud division performed better than anticipated in the second quarter, lifting other members of the coveted trillion-dollar club, with Microsoft MSFT.O and Alphabet GOOGL.O both up more than 1%.

Wall Street analysts said Amazon's quarterly earnings and sales exceeded expectations, demonstrating that the company's two core divisions can expand together after two years of "unpleasant surprises."

"The second quarter is a game-changing quarter for Amazon; we would call it an-all clear moment," SVB MoffettNathanson analyst Michael Morton said.

"Retail and AWS (Amazon Web Services) are collaborating." "There will be no more handwringing about retail losses or AWS optimization, but rather about 'how high can retail margins go' and 'when can we see the benefit of artificial intelligence at AWS?'"

According to Refinitiv data, at least 17 analysts boosted their price targets on the company, increasing the consensus estimate to $154. That is a roughly 20% increase in a stock that has already surged over 50% this year.

Amazon has a 12-month ahead P/E ratio of 58.78, which is much higher than Apple's 29.5 and the industry median of 14.87.

The iPhone manufacturer warned on Thursday that Apple was on track for its fourth consecutive quarter of falling sales as demand for its flagship handset slowed, particularly in developed nations.

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