AMAZON Inc’s shares jumped in early trading on Friday, a day after the company reported profit and revenue that swept away analysts’ estimates along with doubts about the online retailer’s investment spree.
“It’s all just working,” JP Morgan analysts wrote in a research note.
“While it’s tempting to try to pull out each component of AMZN’s strong 1Q (and generally recent) performance, we think it’s the combination of many factors – the ‘AMZN Flywheel’, Prime, a growing distribution footprint, getting closer to customers, 3P (third party), AWS … the list goes on.”
The “Amazon Flywheel” refers to founder Jeff Bezos’ strategy of offering the biggest selection of goods at the lowest prices and providing the best customer experience to create a “positive feedback loop”.
Amazon is also known for making bold investments in new business areas even at the expense of profits – a strategy that is often criticized by investors.
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