- Oct 1, 2016
For those who don’t know, yesterday Amazon stock went up near 14% after a huge earnings beat. Unlike Apple, Amazon’s earnings have been consistently higher, despite the razor thin margins on their Echo products and Prime memberships. They were propelled to record earnings by huge purchases on Prime Day and increased purchases overall. This is why I invested in Amazon last May. Bezos’ genius is selling these products, which would seem to make little money, but actually make a huge amount of money for Amazon. Echo has introduced a whole new way of buying products, simply vocally asking. An increase of Amazon purchases is no-doubt a result of the introduction of Alexa. Alexa even charges different prices than the Amazon marketplace on a computer. Amazon gets right what Apple often gets wrong - growth is much more important than profits. Amazon envisions their devices not purely as high-margin money makers, but as a channel for a broader purchases.