When the pandemic hit last year, most of corporate America got caught flat-footed. More than 200,000 businesses, including many restaurants and retailers, permanently shuttered owing to COVID-19, according to estimates.
Amazon, meanwhile, kept on growing, becoming much more massive.
Even in the face of supply chain slowdowns, a tight labor market, and COVID-19 outbreaks in its facilities, Amazon has become the go-to source over the past two years for people around the globe looking for everything from essential goods like laundry detergent and toilet paper to work-from-home necessities such as soundproof headphones.
To keep up with demand, Amazon added hundreds of thousands of new employees to its workforce, snatched up cargo planes that it can retrofit for shipping its products around the globe, and dramatically expanded its network of fulfillment and distribution centers to handle the uptick in orders. It isn’t just its e-commerce business that has prospered during COVID-19, either. Amazon Web Services continues to power much of the internet, even having posted faster growth than the company in its entirety during the second quarter. And Amazon’s video streaming service has been one of the most added by American households. Investors have rewarded the company’s growth by nearly doubling share prices from their late-2019 levels.
“It is one of the most diversified companies out there,” Forrester principal analyst Sucharita Kodali tells Fortune. And though that would typically attract plenty of activist investor interest and concern from the market, with skeptics seeing more room to run for one component of the business than the others, “in Amazon’s case, it just defies gravity,” Kodali says.
Led by newly minted CEO Andy Jassy, Amazon’s market capitalization is the fourth-largest in the S&P 500 at $1.67 trillion, putting it behind only fellow tech giants Apple, Microsoft, and Alphabet. Since the start of 2020, Amazon’s growth has far exceeded that of its more direct competitors like eBay, Walmart, and Alibaba, too.
Amazon shares are currently trading north of $3,300, up 94% over the past two years.
With consumers locked away at home, online store sales for Amazon have jumped 57% from their pre-pandemic levels. Sales from third-party sellers, meanwhile, have risen almost 80%. And Amazon Web Services, the cloud infrastructure business that powers a massive chunk of the internet, has seen its sales rise more than 50%, as has Amazon’s subscription business (think Amazon Prime).
Amazon Prime Video has become the second–fastest-growing streaming service in the U.S. during the pandemic, too, having seen 37% growth in subscribing households between January 2020 and June 2021, according to eMarketer and Comscore data. Hulu was the only service that saw more growth.
In fact, the only business of Amazon’s that has struggled during the pandemic is its growing network of physical stores, an ironic twist that proves just how valuable its roots in e-commerce have become.
To meet the mounting appetite for Amazon’s services since the start of 2020, the company has had to undertake a dramatic expansion plan. It has moved to beef up its delivery capabilities with a spate of new fulfillment and distribution centers across the U.S., while increasing the number of daily flights it makes with Amazon Air from 85 in May 2020 to 140 in February. And its count of employees worldwide has grown from around 750,000 in October 2019 to more than 1.3 million in June. Amazon plans to hire more, too. It has outlined plans to fill more than 185,000 additional new positions around the world in recent weeks, and that doesn’t include the hiring Amazon usually does for the holiday season.
Revenues all told have spiked for Amazon during the pandemic, jumping 44% in the first quarter from the same period in 2020 when COVID-19 had just begun to take hold in the U.S. Its latest revenues were up about 27% year over year. Quarterly profits, meanwhile, hit $7.8 billion in the most recently reported period, compared with $5.2 billion in the same period of 2020.
Amazon is not completely immune to today’s economic environment, though.
The company, like any other, is facing a staggeringly tight labor market that is driving wages higher and making it more difficult to bring aboard new people quickly. Adding to the potential struggles in expanding its workforce are the long-standing concerns over working conditions in parts of Amazon’s business, particularly among its warehouse workers and drivers. Supply chains around the world are also still jammed up with the Delta variant of COVID-19 continuing to cause slowdowns.
Yet, the long-term opportunity remains, Bank of America analyst Justin Post wrote in an Oct. 13 research report. With shipping times expected to improve in 2022, easier year-over-year comparisons, and more products available faster, Post sees Amazon as a top pick among global e-commerce stocks in the new year—with the potential for its shares to surpass $4,500.
None of this is seemingly lost on Bezos.
On Oct. 10, the Amazon founder, who is executive chair of the company today, tweeted a picture of the cover of Barron’s from May of 1999, which featured the headline “AMAZON.BOMB.”
The story within painted a picture of an online bookseller in despair that was facing mounting competition from Walmart and other retailers. Shares of Amazon’s stock would flounder in the years after the Barron’s article published and the company stood up its broader e-commerce push.
Since then, the company’s shares have been almost nothing but up.
“This was just one of the many stories telling us all the ways we were going to fail,” Bezos tweeted. “Today, Amazon is one of the world’s most successful companies and has revolutionized two entirely different industries.”
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