Amazon is set to post profits during its second quarter despite warning investors in April that $4 billion in earnings would be wiped out by the pandemic.
Ahead of the release of its quarterly figures on Thursday, analysts have predicted that the retail giant is likely to still eek out a profit during the period thanks to an influx of new Amazon Prime customers.
In late April, Amazon said that the coronavirus pandemic will cost it a whopping $4 billion (£3.19 billion) over the next three months, all but wiping out its projected profits.
Amazon chief executive Jeff Bezos told investors to “take a seat”, warning that although the company expected to make profits of $4 billion or more, it would “spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe.”
Despite this, analysts at Wedbush believe that a spike in demand for Amazon’s Prime service during lockdown could offset this monumental expense and enable the ecommerce retailer still achieve a profit.
“The big focus will be Amazon Prime in terms of membership, especially as it’s becoming the main way for consumers to get their daily necessities in this semi-lockdown, and there’s a laser focus on cloud because right now, only 30pc of workloads are in cloud, going to 55pc in the next two years. Amazon’s a huge beneficiary of that dynamic,” Wedbush analyst Dan Ives said.
It comes as Amazon shares jumped over seven per cent, seeing Bezos increase his personal wealth by $13 billion in just one day.
This marked the largest single-day increase in individual wealth on record and cemented Amazon’s shares as some of the best performing on the market, rising a whopping 73 per cent this year so far.