5 Times The Amazon Stock Exceeded Expectations In NASDAQ
At times, the stock market may seem like a scary place. On some days, you might be doing whatever it takes to profit from the swings and yet return empty-handed. All these may prompt you to feel demotivated and introspect about the efficacy of your otherwise perfectly working strategies.
But what if your failures are not the fallout of your strategies but the place where you are trading and the stock you have selected to trade? If the pricing history, chart patterns, and fundamentals are any indication, the chances are high that if you select the Amazon stock in NASDAQ, you will never return empty-handed. And, having a stock market API by your side can substantially increase the odds of success.
If all these seem like a dream, then worry no more, as we take you through five such instances when the Amazon stock gave insane returns, at a time when no one imagined the potential of this ecommerce giant.
So, grab a seat, as we take you through the Amazon stock's journey from US$5 in 1998 to US$3,531 in 2020 and the top five instances when the stock's performance exceeded expectations.
Five Times the Amazon Stock Exceeded Expectation
Stock market trading works in two modes - short-term and long-term. Short-term trading includes intraday trading, scalping, etc. Positional trading includes buying a stock, holding it for a week to many years before selling with a profit.
Amazon has a history of giving stellar returns in both formats. However, for practical purposes, this article will look at periods at large and happily ignore intraday highs and lows while finding out Amazon's history of mind-blowing returns.
Here are the years when Amazon's returns surpassed many other bluechip stocks on NASDAQ.
1997/1998 - The Year of the IPO
When Amazon filed for a public listing, it had just 256 employees. It was only a 'leading retailer of books.' But was that the only reason for its super-successful IPO?
Before moving any further, here are a few stats that you should skim through.
- In 1997, Amazon had a market capitalization of $438 million.
- Although the listing price was $18 per share, post the split in 1998, the stock price touched a low of $4.26, a tad lower than its year open price of $4.96.
- In the same year, the stock made a high of $58.65 and closed at $53.55
- Its yearly average price was a decent $15.67
- The yearly percentage gain from the lowest point to the highest point was a whopping 966.56%.
So, what led to this gravity-defying growth? To put it in perspective, let's do a bit more number-crunching.
- Amazon's Average Daily Visits had increased to 80,000 in March 1997, compared to 2,200 a couple of years back.
- The US book market was expected to grow to $30 billion in 2000 compared to $26 billion in 1996.
- In two years, Amazon increased its employee count from 11 to 256.
- In 1996, its revenue grew by more than 2900 percent. In numbers, it's $511,000 to $15.75 million.
- Its revenue was $8.47 million in the final quarter of 1996, which grew to $16 million in 1997's first quarter.
Interestingly, Amazon's worth was far more than the price it received back then. It garnered a little over $53 million, which took its market capitalization to $438 million.
Hence, 1997 and 1998 together qualify as the first instance when Amazon caught the investors' fancy and traders trading in NASDAQ. The stock rose to $106.70 in 1999.
2003 — The Year of the AWS
If the 1997 to 1999 period was a primer, the movie made its debut in 2003. Although this came after two years of incessant beating, in which the stock's valuation dropped and its price vaulted to as low as $5.97 (in 2001).
Here are a few stats that make 2003 a case worth studying.
- The stock opened the year at $19.57 and made a high of $59.91.
- It eventually closed the year at $52.62, resulting in a $178.56% profit for those who captured the momentum.
So, why is 2003 a special year for Amazon?
The answer is simple - Amazon's unconventional business model. 2000 was a horrifying year for all IT and eCommerce companies across the world. However, Amazon's reliance on an unconventional marketing strategy, including the launch of Amazon Web Services (AWS), and a strong balance sheet ensured that it came out unscathed.
2007 — Profits Start Soaring
After a lackluster performance in the couple of years that followed, Amazon again proved its mettle in 2007.
Here is a laydown of what happened.
- The stock opened the year at a modest $38.70 per share
- It made a high of $100.82 and closed the year at $92.64, giving returns of 134.77%.
- The Average Price of the stock rose to $67.23, compared to $35.91 in the preceding year.
The massive growth happened for four reasons.
- It launched the flagship 'Amazon Prime' two years back, which was an instant hit among the 100-million strong customer base.
- It launched Kindle, a device that transformed the way people read books.
- The Operating Cash Flow jumped from $702 to $1,405.
- The Net Income rose from $190 million in 2006 to $476 in 2007.
2009 — The Growth Momentum Acquires Pace
2009 was a special year for Amazon shareholders. The stock opened at $54.36 and reached the level of $142.25 in no time. It finally ended the year at $134.52, a whopping 162.32% gain.
2009 was the year when Amazon was getting fruits from the seeds it had sown in the past decade, including the acquisition of the world's largest audiobook platform, Audible, in 2008. Its Operating Cash Flow soared to $3.2 million from a modest $1.6 million in 2008. The net income jumped from 645 million USD to 902 million USD.
2015 Onwards — Bulls' Favorite Counter
From 2015 onwards, Amazon has been a playground for the Bulls. The stock has given 117% returns in 2015, 10.95% in 2016, 55.96% in 2017, 28.43% in 2018, 23% in 2019, and 72.37% in 2020. With some of 2020 still to come, we can expect the stock to continue its bull run.
As of 2019, Amazon had a little more than 6,47,000 employees. Its Operating Cash Flow was 38,514 million USD, compared to 0.69 in 1997. If you need more reasons to invest in Amazon, open the chart on TradingView to spot an opportunity.
Back to the list