Amazon's Remarkable 6% Surge Post-Earnings - What Does This Signal For Savvy Investors!

• Amazon Prime Video in the UK has introduced a new advertising model in partnership with Reach.
• The implementation of ads has sparked controversy among UK subscribers.
• Amazon's stock value has rose significantly in 2023, with a 77% increase followed by an 11% rise for 2024 so far.

Amazon.com Inc AMZN has rolled out a fresh advertising model for its viewers in the UK. A recent agreement between the company and Reach has put customer data at the forefront of their efforts to boost online advertising targeting.

This move reflects Amazon's commitment to refining its advertising strategies and strategically maximizing its revenue streams.

The recent introduction of advertisements on Amazon Prime Video has sparked controversy, especially among subscribers in the UK. They are now being exposed to ads at the beginning, during, and at the end of shows and movies.

This change has generated significant backlash, as subscribers can only avoid these ads by paying an extra fee of £2.99 per month. Consequently, some subscribers are contemplating canceling their accounts, expressing their discontent with the abrupt introduction of ads.

Financially speaking, Amazon has taken a gamble with this move. The cost of an Amazon Prime subscription, along with the added charge for an ad-free experience, now surpasses the price of standard subscriptions from major competitors like Netflix and Disney+. Interestingly, both Netflix and Disney+ offer ad-free viewing in their basic packages.

The company's stock performance tells a different story despite the customer backlash. In 2023, they experienced a 77% increase in its stock value, and this upward trend has continued into 2024, with an already recorded 11% rise.

The company's financial success was further strengthened by its earnings release on February 1st, surpassing expectations. Estimated at $0.74 per share, the actual earnings came in at $1.00 per share.

This positive news resulted in a significant boost in stock value, with the stock opening up by 6% the following day and closing nearly 8% higher.

Amazon's stock value is surging, inching closer to its all-time high of $188, recorded in July 2021. Currently, the stock price is just 11% away from reaching this peak and close to creating new record highs.

After the closing bell on Friday, February 2, the stock closed at $171.81, trading down by 7.80%.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.