Amazon Stock Surges on Breakout Earnings Report

Amazon's stock price has struggled to keep pace with the S&P 500 since Jeff Bezos stepped down as CEO in 2021, but the company's recent earnings report may signal a turning point. The stock surged 15.3% on July 31 after Amazon reported its strongest growth in five years and a record-breaking quarter for its cloud computing business, Amazon Web Services.

Amazon Web Services (AWS) saw revenue jump 37% to $42.2 billion, the fastest rate in 18 quarters. The company's operating income also rose 43% to $27.5 billion, exceeding analyst expectations. The strong performance was fueled by a breakout earnings report that included Amazon's fastest revenue growth in five years.

However, not all is well at Amazon. The company has guided to revenue growth of just 9%-12% in the third quarter, which may be a sign that its recent gains are unsustainable. Additionally, Amazon's Prime Day was moved from July to June this year, temporarily inflating revenue and adding approximately 500 basis points to its total growth.