Amazon results boost Nasdaq, shares climb

Amazon helped lift U.S. stocks back up again on Friday after reporting profit in the holiday quarter that beat expectations, giving investors something to cheer at the end of a volatile trading week.

The e-commerce giant also surprised investors by breaking out advertising as a separate business for the first time, and said it was raising the price of its U.S. Prime subscriptions.

Shares rose more than 13% by midday Friday in what would be the stock's biggest one-day percentage gain since October 2017.

For the holiday quarter, Amazon earned $14 billion, double its net income from a year earlier.

Its key cloud unit Amazon Web Services performed better than expected, posting a 40% increase in revenue, as demand rose for gaming and remote work during the pandemic.

On the heels of a windfall from more at-home shopping, Amazon has poured money into its operations to manage disruptions, most recently the Omicron variant. Amazon has also marketed signing bonuses to attract hundreds of thousands of workers in a tight labor market, and has paid more for shipping.

But hiking the price of Prime for Amazon's more than 200 million paid subscribers looked like a way to offset those higher costs, a move analysts had expected. Annual memberships will go up to $139, from $119 this month.

Breaking out its advertising business may have been the biggest treat for analysts and investors, who used to have to guess its size. And they liked what they saw.

Ad revenue jumped 32% to $9.7 billion. That's bigger than the ad sales Google-parent Alphabet reported for YouTube in the same quarter.

Amazon also said its ad business was "largely unchanged" after Apple's privacy tweaks to its operating system. Those same changes made it more difficult for brands to target ads on Instagram and Facebook, which led to Meta Platforms' dire forecast that tanked the tech sector on Thursday and knocked shares of Meta down 26%.