Amazon.com Inc (NASDAQ: AMZN) stock fell more than 5% on Friday as the three main indexes in the US are heading for their worst week since March.
Pushing tech stocks lower has been a general downbeat investing attitude in the run-up to the US election and the continuing spread of the coronavirus pandemic in the US and in Europe.
On Thursday, Amazon.com Inc (NASDAQ: AMZN) reported third-quarter results which surpassed market expectations. The online retail giant recorded a 37% year-over-year revenue growth in the last quarter, with profits tripling to $6.3 billion from the same period last year. Operating cash flow increased by 56% to $55.3 billion. Amazon reported earnings per share of $12.37, which was 67% higher than estimates of $7.41.
The global pandemic has been good for Amazon. Between April and June, whilst the global lockdowns took effect, Amazon’s net income doubled year over year to $5.2 billion.Daily Invest News wrote why the Amazon.com Inc (NASDAQ: AMZN) stock remains a good buy earlier this week. Today’s tumble doesn’t change that. The decline was more to external factors with the upcoming election in only two market days time casting a dark shadow over US stocks, especially in the tech sector which saw Twitter Inc (NYSE: TWTR) stock slump about 20% after it added fewer users than expected, whilst posting a warning over the possible impact on the ad revenue from the U.S. elections. Facebook Inc (NASDAQ: FB) also posted a 5.7% decline as it warned of a more challenging 2021 ahead.
Amazon.com Inc (NASDAQ: AMZN) Warns of Increased Costs, But Forecast Remains Strong
Indeed, Amazon warned of Q4 profitability in their earnings report, forecasting a jump in costs related to COVID-19, expecting to spend another $4 billion on costs related to COVID-19 in the next quarter.
However, The company has been one of the few big tech firms to increase their headcount during the pandemic, adding 36,400 in the last quarter alone, making it nearly a million full-time employees globally. And that number will grow. Only last month, Amazon announced a further 33,000 Corporate and Tech jobs open across the U.S.
With a continuing pandemic raging and the US, UK and Europe teetering on the brink of second lockdowns, whatever costs related to COVID-19 Amazon may incur the rewards to COVID-19 appear to be much greater.
