To The Moon

Shares of $Amazon.com(AMZN)$ popped more than 14% after hours following a strong quarterly report. The company reported its investment in electric vehicle company Rivian gained almost $12 billion in the fourth quarter. Amazon also announced it would increase the price of Prime by nearly 17%. Amazon Web Services also delivered almost 40% year-over-year growth in the fourth quarter, beating Wall Street estimates.Here are the key numbers: Earnings per share (adjusted): $5.80 vs $3.57 expected, according to a Refinitiv survey of analysts Revenue: $137.4 billion vs $137.6 billion expected, according to a Refinitiv survey of analysts AWS revenue: $17.8 billion vs $17.37 billion expected, according to StreetAccount Amazon guided for first quarter revenue of between $112 billion and $117 billion, below the average estimate of $120 billion, according to Refinitiv. Even with the weaker-than-expected sales number and disappointing guidance, Amazon gave investors enough confidence that growth will recover. Revenue grew 9% Amazon's net quarterly sales grew 9% year over year to $137.4 billion, which missed the analyst's expectation.The slow down in growth was mainly dragged down by the online store. Its performance is impressive because it faced a tough comparable: It grew 40% year over year in the fourth quarter of 2020. At that time, the pandemic was raging . People prefer online shopping. One year passed, vaccines had begun to roll out, In some places lockdowns are being eased, people go to brick-and-mortar shopping. Amazon’s online store revenue sales decreased 1% to $66.07 billion, compared with $66.45 billion in 2020. Third-Party Seller Services net sales were $30.32 billion, up 11% year over year. Net sales from subscription services were $8.123 billion, up 15% year-over-year; net sales from Physical Stores were $4.688 billion, up 17% year-over-year.The reason why Amazon's growth rate has declined is mainly due to the impact of the macro economy. After the U.S. Department of Commerce released December retail sales data, many analysts actually lowered Amazon's fourth-quarter revenue forecast to $137.6 billion from $137.8 billion in mid-December. US retail sales sank 1.9% mom in December, the biggest decline since February of 2021, Advance estimates of U.S. retail and food services sales for December 2021, were $626.8 billion, adecrease of 1.9 percentfrom the previous month, but 16.9 percent above December 2020. AWS climbed almost 40% Amazon's revenue growth was driven by a powerful performance by the company's AWS cloud-computing business.The company’s cloud computing business was one notable bright spot. Revenue at Amazon Web Services climbed almost 40% to $17.78 billion, topping analysts’ estimates.The AWS business has been rising in recent quarters. Although Microsoft and Google have successively increased their investment in the cloud business, it is still difficult to catch up with Amazon. According to previously released earnings reports from Microsoft and Google. Google Cloud Services revenue increased 44.6% year over year.Although AWS cloud service revenue only accounts for nearly 13% of Amazon's total revenue, 153% of the company's total operating income comes from cloud computing. Advertising services grew 32% Amazon disclosed revenue from its fast growing advertising business for the first time. Advertising services grew 32% year over year to $9.7 billion during the quarter.Amazon does not break out specific financials for advertising, but its “Other” category primarily includes sales of advertising services. And revenue for that category has skyrocketed over the past few years, now making up more than 7% of Amazon’s total revenue and helping fuel its bottom line given the high profit margins in digital advertising.The reason for the surge in Amazon’s advertising business is mainly due to the development of e-commerce. According to a report by Jungle Scout, 74% of consumers will choose to search for their products on Amazon. Compared with the previous choice of Google search, consumers prefer searching for products on Amazon, so it is increasingly taking market share from Google and Facebook.EPS nearly doubled, but… Net income jumped 99% year over year to $14.3 billion, which translated to earnings per share (EPS) surging 97% to $27.75. Amazon’s big profit gain on Rivian is the result of the electric vehicle maker’s IPO in November.Rivian, electric vehicle maker, went public on Nasdaq in November with an offering price of $78, raising $12 billion in financing, valuing the company at $66.5 billion. Amazon has invested more than $1.3 billion in Rivian, and Amazon owns about 160 million shares of Rivian. Rivian shares climbed above $172 at its peak. Excluding Rivian's contribution would reduce Amazon's earnings per share by 83%, or about $4.85 per share.