Jeff Bezos has just added several billion to his net worth after Amazon’s stock rose over 11% in extended trading after beating Wall Street expectations for the 4th quarter. Also, Amazon has become the fourth company in the world to surpass the trillion-dollar mark by the market cap in the United States, after Apple, Alphabet, and Microsoft.
Bloomberg claims Bezos added $13.2 billion, which raised his net worth to about $129.5 billion while Forbes believes his takeaway was about $12.8 billion making his net worth reach $128.9 billion. With this, Bezos has pulled Bill Gates further away who sits in second on Forbes’ list of the richest people in the world.
Why this sudden growth in wealth?
Amazon reported earnings of $6.47 per share and $87.44 billion in revenue for the quarter. Analysts expected $4.03 per share and $86.02 billion in revenue, according to Refinitiv. This is because Amazon posted holiday quarter results well above expectations. Also, the memberships in Amazon’s Prime loyalty club notched a 50% rise in two years.
The main causes
Talking about the main causes of this, Customers keep return to Amazon more frequently due to features like fast delivery, television and music streaming. Also, its voice-controlled Echo speakers have helped in increasing engagement of customers and grocery orders have increased very fast after Amazon’s 2017 decision to buy Whole Foods Market.
The change in Business model
In recent times, Amazon is transforming its business model by moving away from low-margin retail to a marketplace model where it charges fees for shipping and advertising the products of other merchants on its platform. Amazon is building the product inventories closer to customers and the strong delivery network is helping the company achieve accuracy. Infrastructure and marketing costs have increased in big numbers.
On the other hand, Amazon’s rival Microsoft is concentrating on future technologies right now. Microsoft on Wednesday reported a 62% quarterly increase in sales for its Azure cloud computing service.
It will be interesting to see how these 2 major tech giants operate in the future.
