Investor expectations is a very difficult phrase to define, but investors will know if a company did better than expected or not. The easiest way to describe it is through the Price/Earnings Ratio is a multiple. The stock price divided by the earnings per share. The stock is trading at 15 times earnings, if the earnings is good, the price should move up to stay with the 15 times ratio. If the earnings is not so good, the stock price should fall to stay with the 15 times ratio. All stocks trading on the exchange have investor expectations which are delivered quarterly. It is up to management to meet or exceed investor expectations or to ensure investor expectations are down if they are going to not meet expectations, without allowing more sophisticated investors the signs to say bad things are happening. One company that surpassed investor expectations was Amazon.

In an article by Chavi Mehta of Reuters, Amazon reported sales growth and profit ahead of Wall Street expectations as the company delivered goods cheaper and faster to shoppers, as well as cloud computing is looking good.

Amazon is the world’s largest cloud provider through AWS and online retailer.

CEO Andy Jassy said investors will see practical applications of AI in Amazon’s 3rd quarter.

Amazon’s revenue grew 13% to #134.4 billion compared to estimates of $131.5 billion.

AWS growth stabilized as customers shifted from cost optimization to new workload deployments. Its revenues were $22.1 billion.

Amazon had a quarterly profit of $6.7 billion.

Prime Day is one of the biggest sales day and Amazon has high expectations for the next one.

Linking to dividend paying stocks, all the large stocks have analysts watching the stock and trying to determine how it will do. Most of the stocks, the analysts will get right or within 1 or 2%, it is the quality of the estimates, however once in a while a company beats estimates and the price goes up. That is a good thing if you are selling, if you are not selling, it is nice thing. If a stock beats its estimate or does not meet it, you have to ask yourself why did you buy the stock? what kind of return were you hoping for? should I sell some now or hold on for a longer period of time. It is important to understand why you bought in the first place?

There are more questions than answers, till the next time – to raising questions.