Amazon stock was up almost 14% on Friday after the company reported solid earnings and said it was raising the price of its Prime membership for the first time since 2018.
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Tech investors just survived what could be the most tumultuous stretch of earnings we’ve ever seen.
The tech megacaps—
(MSFT)—are some of the most widely scrutinized institutions on Earth. Investors, analysts, journalists, and legislators poke, prod, test, and study the companies down to a microscopic level. And yet this quarter, each one of them managed to surprise. Facebook parent Meta Platforms tanked the entire market on Thursday after its weak report, only to see stocks rescued a day later by Amazon’s impressive growth.
Now that we’ve had a few minutes to breathe, here are some thoughts on tech’s crazy week:
Amazon’s strategy of diversification is paying off: This was the quarter that Amazon clearly demonstrated that it’s far more than an e-tailer. Its Amazon Web Services cloud business is on fire—it’s arguably a more valuable (and far less cyclical) business than the company’s legacy e-commerce arm. It is no accident that founder Jeff Bezos chose Andy Jassy—who built and ran AWS—to be his successor as CEO.
But there’s more to the quarter. Amazon’s advertising business generated $10 billion in sales in the latest period, having doubled in a bit more than a year. It now generates more ad dollars than Google’s YouTube. People come to…