Shares of Amazon reached an all-time high Tuesday morning as the Seattle tech giant deals with unprecedented demand due to the COVID-19 crisis.
Amazon stock was up more than 4 percent, hitting a record price of $2,262/share and eclipsing a previous mark set in February. Shares fell in mid-February amid the larger stock market drop, but Amazon has bounced back, with the stock up more than 30% since March 16. The company’s market value is now more than $1.1 trillion.
As other tech companies freeze hiring and face an uncertain financial future, Amazon is bucking the trend.
The company is struggling to keep up with demand spikes from customers confined to their homes under shutdown orders around the world. It added 100,000 new warehouse workers over the past month to help fulfill the surge in orders and said this week it will hire an additional 75,000 employees.
In addition to the 100,000 workers already hired, @Amazon is adding another 75,000 & increasing hourly pay. Thank you, @Amazon for working every day to meet the needs of the American people as we face this pandemic together.https://t.co/nDmoy02E6u
— Mike Pence (@Mike_Pence) April 13, 2020
The fulfillment centers that power Amazon’s e-commerce business are similarly inundated. Amazon temporarily stopped accepting shipments of non-essential items to its warehouses so household goods and medical supplies could be restocked.
Amazon’s grocery delivery service is also seeing huge demand as more people order groceries online. The company said Sunday that it won’t accept new customers for its Amazon Fresh grocery delivery service and will place them on a waitlist. Amazon is reserving some shopping hours at its Whole Foods grocery stores so that online delivery orders can be fulfilled.
Amazon is expected to report its first quarter earnings later this month. Revenue will may be higher than anticipated, though Amazon is also spending more than $350 million on its response to the pandemic.
Analysts at Jefferies conducted two surveys of about 630 U.S. adults on March 10 and March 27 that show how the pandemic is influencing demand for Amazon’s products and delivery horsepower. Amazon was the only online retailer that saw increased consumer spend, according to the surveys. The percentage of consumers who said they are spending more on Amazon jumped from 14% to 34%. Consumers are spending less on other sites such as eBay and Etsy, according to the analysis.
Amazon also has other businesses including Amazon Web Services, Twitch, and Prime Video that could give the company more of an advantage over competitors amid the pandemic.
Mark Mahaney, an analyst with RBC Capital Markets, wrote earlier this year that “Amazon is better positioned than most other names in our coverage universe to weather this macro uncertainty given the diversity of its business.”
High demand is not the only challenge Amazon faces during this crisis. The company is taking heat for a growing number of COVID-19 cases inside its warehouses. Politicians and labor activists are criticizing Amazon and calling for broader safety measures. Amazon this month fired two highly visible employee activists who regularly criticize the company’s position on climate change and conditions inside its fulfillment centers.
Amazon says it has implemented 150 new process changes and is taking extreme steps to protect employees. It is also attempting to build an internal lab to test employees for the virus, rather than waiting for government testing to scale up.
