Big Moves Ahead For Amazon (NASDAQ: AMZN)

After Tuesday’s session ended, e-commerce giant Amazon (NASDAQ: AMZN) reported their Q4 earnings to an eagerly awaiting Wall Street. While the fact that the earnings beat expectations may not have been all that surprising, surely there were not many who saw them being beat by so much. EPS came in almost 100% higher than the consensus while revenue was 4%, a cool $6 billion, higher than what analysts were waiting for.

The numbers capped off a fabulous year for the company, one that saw them take full advantage of the global pandemic and strengthen their position as one of the biggest e-tail companies out there. This cultural shift to online purchasing helped ramp sales up 44% on the year and played a big part in Amazon reporting quarterly revenue north of $100 billion for the first time. Operating cash flow was also up 72% on the year in what was by any measure just a stellar report.

Bezos Leaving

For all that though, shares found themselves dipping in after hours trading, as investors struggled to digest the news that CEO Jeff Bezos is planning to step down from the helm in Q3 of this year. Bezos struck a humble note when he said; “Amazon is what it is because of invention. We do crazy things together and then make them normal. If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

Bezos will undoubtedly go down in history as one of the great tech visionaries and leaders who redefined the possible and the impossible. Andy Jassy, the current head of Amazon Web Services will replace Bezos, who’ll transition to the role of Executive Chair.

Long Tech

While the news is likely to bring some volatility to Amazon shares, it’s unlikely to do any real damage after those kinds of quarterly numbers were reported. It’s been a good start to the year for both Amazon and the rest of Big Tech, many of whom found themselves finishing 2020 a little quieter than expected, as the big money shifted to vaccine led COVID recovery plays. But the NASDAQ has found itself at fresh all time highs several times in 2021 already, and Amazon’s Q4 numbers will do no harm at all to those that are long tech. Only last week Apple (NASDAQ: AAPL) also reported their first quarterly revenue above the $100 billion mark while Google (NASDAQ: GOOGL) beat their Q4 revenue expectations by 24% in their report last night.

Even with Reddit fuelled short squeezes signalling to many investors that speculation is at a high and a pullback is near, Wedbush is still “firmly bullish” on tech stocks with their “the eye-popping earnings strength” helping to keep the bear camp quiet for another while yet. In a note to clients on Monday, they said "our unwavering view is that tech stocks could have another 25%-plus upward move in the cards for 2021 as Street numbers continue to move higher and a further re-rating of the tech sector takes place."

Amazon remains a truly dream stock to hold for the long term, as yesterday’s quarterly numbers put it even further ahead of the competition. The news of Bezos’ departure will be digested and then left aside, as Amazon gets back to business after their biggest quarter ever.