The latest consumer technology and recession-busting online bargains have encouraged shoppers to open their wallets again, according to earnings reports that sent some leading tech stocks higher on Friday.
Shares in Amazon, the world’s largest online retailer, soared 27 per cent on Friday, returning to a peak last reached at the height of the dotcom boom, after it registered a 28 per cent rise in sales in its latest quarter
After a year in which the world’s biggest tech company has suffered its first fall in sales and been forced to make its first company-wide job cuts, the news lifted hopes the sector had turned a corner. Microsoft shares closed up 5 per cent after earlier touching a 52-week high.
Some tech executives warned, however, that a rebound in corporate IT spending, which accounts for the bulk of tech purchases, was still needed to lift the entire industry out of the doldrums.
“The big variable in terms of the rebound is going to be the strength and speed” of the revival in corporate spending, said Chris Liddell, chief financial officer of Microsoft.
Consumer demand for technology, from PCs to new digital gadgets such as Apple’s iPhone, has helped revive Wall Street’s interest in the tech sector.
The soaring market value of Apple, the company at the forefront of consumer technology, has eclipsed household names such as JPMorgan and Procter & Gamble since the beginning of this month, making it the fourth most valuable US company, at $183bn. At the depth of its fortunes in 1997, before the return of co-founder Steve Jobs, Apple was worth less than $2bn.
Amazon said its Kindle electronic reader, first introduced two years ago, is now its best-selling item both in unit sales and dollars. The demand for the $259 device points to the readiness of supposedly “budget-conscious” shoppers to spend on “must have” electronic devices.
Wider bargain-hunting has been evident in solid results in recent days from internet companies, including Amazon and Google.
Walmart does not break out its online sales, but it indicated this week that they had grown slighty faster than Amazon’s during the year so far.