Investors was particularly unnerved by Chief Executive Officer Jeff Bezos's strategy of constantly investing in costly offerings like faster delivery of more goods. The $20 price hike will apply to existing renewals beginning on June 16.
As CNN Money notes, this is the first time that Amazon has raised the cost of Prime in four years.
Starting May 11, new Prime member subscribers will pay $119 per year for the service.
"We continue to increase the value of Prime", Amazon CFO Brian Olsavsky said on the call, adding that the company has added "digital benefits", like Prime Video. Prime members can now get more than 100 million products through free two-day shipping compared to 20 million in 2014. It is unusual to see revenue growth increase significantly at Amazon's size and in a hypercompetitive market, and it seems to have prompted Mr. Bezos to single out the business in his statement.
That is quite a list of spending priorities, and it shows in Amazon's results.
AWS, the company's cloud services division, outpaced Amazon.com's overall growth with $5.4bn in revenue, up 49 per cent from the $3.7bn reported for the year-ago quarter. Analysts had a consensus revenue estimate of $49.87 billion for the quarter.
Though the annual cost remained steady over the past few years, Amazon did increase the monthly cost from $10.99/month to $12.99/month earlier this year. "Again, it's a testament to where the momentum is going and the momentum is moving toward Amazon's best interest".
Amazon's profit for the first quarter of this year more than doubled from the same period last year, to $1.63 billion, the firm reported Thursday. Its closing stock price was $1,517.96.
Global net sales, which were half that of North American sales, rose 34% - compare that to the 16% growth it saw in the first quarter of 2017.
Shares of Amazon spiked as much as 7 percent to a record $1,619 in after-hours trading, erasing recent losses following a series of tweets from President Donald Trump that attacked the company.
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