Finimize - 💵 Take our money, Amazon

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Today's big stories

Amazon's quarterly results were mixed, and, sorry, it's about to charge you more for Prime
Alphabet has hit upon a cheap trick to boost its share price – Read Now
The Bank of England raised interest rates again, in the first back-to-back hike for nearly 20 years

Fashion Bou-tech

What’s Going On Here?

Amazon posted a mixed set of quarterly earnings late on Thursday, but you’re going to just adore the virtually assisted makeover the tech giant’s about to get.

What Does This Mean?

The pandemic-driven surge in online shopping continued to wear off last quarter, with revenue from Amazon’s ecommerce business growing just 6% compared to the same time in 2020. But at least the working-from-home trend doesn’t look like it’s going anywhere fast: Amazon Web Services – the company’s much more profitable cloud computing segment – saw revenue climb by a better-than-expected 40%.

Things could be looking up going forward too: Amazon announced it’d be upping the price for its Prime membership in the US soon – its first price rise since 2018. And since that rollout doesn’t cost Amazon a penny, it’s an extra pile of cash that’ll go straight to its bottom line. Investors, for their part, wanted some of it straight in their pockets: they sent Amazon’s stock up 18% after the news.

Why Should I Care?

Zooming in: Amazon’s got style.
Amazon’s well aware that customers’ preference for “real” stores could stick around, which might be why the company announced last month that it’s planning to launch its own clothing stores. “Amazon Style” will give fashionistas AI-based recommendations in real time, and could help the company claim an even bigger chunk of the lucrative clothing market. It hardly needs it: Amazon overtook Walmart to become the top US clothing retailer last year, according to banking giant Wells Fargo.

Zooming out: Amazon vs inflation.
Amazon’s customers might not just be ditching online shopping, but shopping altogether: data out last week showed Americans spent an inflation-adjusted 1% less on goods and services in December than the month before. That might not sound like much, but it shows they’re feeling the pinch from the country’s 40-year high inflation. And if that continues, Amazon’s earnings next time around might not be so pretty.

You might also like: What do Amazon, Uber, and Chipotle all have in common?

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Analyst Take

The Cheap Trick Alphabet Is Using To Boost Its Share Price

Andrew, Analyst

What’s Going On Here?

Alphabet didn’t just announce blowout fourth-quarter results on Tuesday.

The Google-parent announced a 20-for-1 stock split, meaning anyone holding one of its shares on July 1st will, two weeks later, receive an additional 19 shares.

Each of those new shares will, however, be worth 20 times less than the old ones, and Alphabet itself won’t be worth any more or less.

And while in theory the move changes nothing if you’re an investor in the company, the truth is slightly more complicated.

Because not only could it actually end up giving Alphabet’s stock a boost, it’s also a timely reminder that there’s probably one other company with this plan in the pipeline.

So that’s today’s Insight: why Google’s share split could lift the company’s shares, and which company might be inspired to follow suit.

Read or listen to the Insight here

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