NEW YORK (TheStreet) -- Amazon.com(AMZN) - Get Report stock closed lower by 0.24% to $632.30 in Wednesday's trading session, despite the e-commerce giant's announcement that it has developed its own line of computer chips.
Amazon.com subsidiary Annapurna Labs has created a line of chips named Alpine to be used by manufacturers and service providers, according to a statement by Annapurna Labs.
The chips utilize architecture from Arm Holdings (ARMH), and can be used for video streaming, secure storage, application virtualization, Internet of Things (IoT) and cloud application.
Companies such as Netgear (NTGR) and Synology have launched projects with the Alpine chips, and Annapurna offers a hardware development kit that enables original equipment manufacturers to modify the chips with their own resources.
"Our Alpine platform-on-chip and subsystems product line gives service providers and OEMs a high-performance platform on which they can design hardware that will support growing consumer demands for innovative services, fast connectivity, and many connected devices," Annapurna Labs VP Gary Szilagyi said in a statement.
Amazon.com reached a deal to acquire Annapurna Labs in January of 2015, Bloomberg reports.
Additionally, oil prices and minutes from the most recent Federal Reserve meeting exacerbated investors' concerns about the economy and sent U.S. stocks lower today.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate AMAZON.COM INC as a Hold with a ratings score of C. COM INC (AMZN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Internet & Catalog Retail industry average. The net income increased by 118.1% when compared to the same quarter one year prior, rising from -$437.00 million to $79.00 million.
- AMZN's revenue growth trails the industry average of 38.0%. Since the same quarter one year prior, revenues rose by 23.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AMAZON.COM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMAZON.COM INC swung to a loss, reporting -$0.54 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus -$0.54).
- Powered by its strong earnings growth of 117.89% and other important driving factors, this stock has surged by 122.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market on the basis of return on equity, AMAZON.COM INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: AMZN