In Amazon’s latest earnings report, sales increased double digits and net income more than tripled. This happened due to greater efficiency and growing market share in high-growth areas such as e-commerce and cloud computing.
Since 2020, Amazon has revised its cost structure to favor efficiency and changed its U.S. fulfillment model to a regional one versus a national one. This move alone is bringing down their cost to serve, and the company is just beginning to streamline processes. Amazon continues to invest heavily in cloud computing and enhancing their presence in the Artificial Intelligence (AI) space. Amazon offers customers a wide range of applications all AI-powered across its businesses from shopping assistant to a coding assistant through Amazon Web Services.
Recently, Amazon Web Services experienced substantial growth in both sales and operating income. AWS has achieved a significant annual revenue run rate, which is impressive considering its relatively young age. This is huge for Amazon investors because investments in AI and technology infrastructure are paying off in a big way, and we are still in the early stages of the AI revolution.
Amazon has a solid growth track record. The company’s monetization of AI is just beginning and with its dominance in e-commerce, cloud computing makes it a compelling investment for the foreseeable future.
Best,
Lawson Winchester Team
The views expressed are not necessarily the opinion of Cadaret Grant, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investing is subject to risks including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
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