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Jeff Bezos Will Step Down as Amazon CEO in Q3

Amazon CEO Jeff Bezos will be replaced by the current head of Amazon's cloud division, Andy Jassy. Jim Cramer says 'Buy Amazon!' after the news of the CEO transition came out.

Tech giant Amazon  (AMZN) - Get Inc. Report announced Tuesday after the close that founder and CEO Jeff Bezos will transition to the role of executive chair in the third quarter of this year and be replaced by the current head of Amazon Web Services Andy Jassy.

“Right now I see Amazon at its most inventive ever, making it an optimal time for this transition,” said Bezos in a statement.

“Amazon is what it is because of the invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more,” Bezos said. “If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive."

Jim Cramer said Amazon is a buy after the announcement by Amazon that Jassy would be moving in to replace Bezos. 

The 53-year-old Jassy joined Amazon in 1997 as a marketing manager and founded the hugely profitable Amazon Web Services in 2003 with a team of 57 people. In 2016, he was promoted from senior vice president of AWS to CEO. In 2020's fourth quarter, AWS accounted for only 10% of Amazon's sales, but almost 52% of its operating profit.

Amazon announced the upcoming transition at the same time as its stellar fourth-quarter results, in which it reported revenue of $125.55 billion that beat analyst estimates of $119.72 billion, as well as EPS of $14.09 that beat a $7.30 consensus.

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Amazon shares were up 1.05% to $3,415.50 at last check in after-hours trading Tuesday after rising 1.11% during the day. They are only up about 9% over the last six months, however, compared to the 15.7% rise in the S&P 500 over the same time period

Deutsche Bank reiterated its buy rating on Amazon on Monday. Deutsche Bank said Amazon "underperformed its much smaller e-commerce peers" but remains one of their preferred technology companies.

Bezos founded Amazon as an online bookstore in 1994. Through the years, Amazon initially expanded its e-commerce platform to music and video and gradually grew into the giant technology company it is today.

Amazon went public in 1997 and closed its first day of trading at $1.73 per share.

Amazon is a holding in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AMZN? Learn more now.