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Here's Why Amazon's Stock Is Going Nuts

Jan 30, 2015, 18:58 IST

Michael Seto/Business InsiderAmazon CEO Jeff Bezos

Amazon reported its fourth quarter earnings Thursday night and the stock went flying thanks, up nearly 14% after-hours.

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The stock is still up ~11.77% pre-market.

What has investors so excited?

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Amazon turned a profit!

The company reported earnings per share of $0.45, which was a beat on expectations and a big improvement from the $0.95 loss last quarter.

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The company's gross margin (Amazon's profits excluding the cost of sales) rose to 29.5% from 26.5% from the same period last year, on net sales of $29.33 billion.

Another factor in the stock spike was Amazon's announcement that it plans to start breaking out the financials of its cloud-computing business, Amazon Web Services, next quarter. CEO Jeff Bezos has said that he expects the AWS businesses to be one of the biggest contributors to its business, and investors look forward to seeing exactly how big it's grown.

Although Amazon didn't list revenues for AWS yet (it's in the "other" category, which accounts for about 9% of North American sales, growing year over year), the company said on its call that AWS has over 1 million active customers and that it saw usage grow 90% year over year.

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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