To: bruwin who wrote (74661 ) 12/28/2023 11:17:48 PM From: Elroy Read Replies (2) | Respond to Amazon.qz.com Keep in mind that Amazon consistently lost money for its first several years as a public company. It first reported a quarterly profit in the fourth quarter of 2001 and, at $5 million, it barely counted. Amazon CEO Jeff Bezos has long maintained that investing in future growth is more important than hitting quarterly earnings targets, much to Wall Street’s chagrin. Nowadays companies stay private a long longer than they used to, but the valuations still rocket despite massive losses and / or minimal profit growth. Uber, WeWork, most tech companies start this way, pursuing sales and market share rather than profits. I can't think offhand of many tech stocks that are already public, and losing money. The point is not that losses are the focus, the point of the statement I made was that SALES are what drives tech stock prices, not profits. The newer the tech, the more that is the story. Investing for growth AND delivering growth is what tech is all about. Making fat profits is the end game story for successful tech, and it occurs AFTER the growth phase subsides. Maybe SNOW is a good example of a company where sales growth is much more important to the near term share price than net income growth. If SNOW's sales accelerate meaningful, and SNOW's profit were to decline at the same time, the SNOW share price would likely increase as investors expect the profit to appear in the future when SNOW dominates in nascent market space (something about cloud software something something, I don't follow them closely). SNOW's chart dips because they failed to deliver revenue growth (I think it was actually failed to deliver bookings growth, bookings turn into sale over the course of the year, something like that). If SNOW's sales accelerates, and net income flatlines, SNOW's share price will go up with sales. Since that's a hypothetical. you're going to have to just trust me on that one.
