Please ensure Javascript is enabled for purposes of website accessibility

Why Amazon.com, Inc. Stock Rose 24% in January

By Anders Bylund - Feb 7, 2018 at 1:56PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The e-commerce giant had a doozy of a fourth-quarter report coming up in early February, and investors saw the signs ahead of time.

What happened

Shares of Amazon (AMZN 3.15%) gained 24.1% in January 2018, according to data from S&P Global Market Intelligence. The e-commerce giant released a fantastic earnings report -- in early February. January's surge happened as investors put together evidence of the then-upcoming good news.

So what

First, the National Retail Federation reported a 5.5% spending increase in the 2017 holiday season. The biggest year-over-year increase in more than a decade spurred surging share prices across the retail sector -- including online shopping leader Amazon, of course.

Later, the company increased the monthly fee for Amazon Prime, which provides free shipping on many items plus a streaming video service. Investors embraced that move, which appears designed to move monthly Prime subscribers over to the annual pass instead as part of its long-term customer loyalty programs.

So the signs were there, and Amazon delivered in grand style. Fourth-quarter sales rose 38% year over year, and earnings more than doubled to $3.75 per share -- miles ahead of Wall Street's $1.85 consensus estimate.

White semi truck with a black-and-blue Amazon Prime logo on the trailer.

Image source: Amazon.

Now what

At this point, Amazon has delivered a market-beating 76% return over the last 52 weeks. The company is going from strength to strength, bolstering its high-volume but low-margin retail business with a smaller but far more profitable cloud computing business. If you thought you had missed the boat on Amazon's headiest growth, don't worry -- those growth rates are still accelerating in many ways:

AMZN Revenue (TTM) Chart

AMZN Revenue (TTM) data by YCharts

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$109.56 (3.15%) $3.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.