2 Reasons to Buy Amazon Stock Like There's No Tomorrow
Tuesday, Dec 10, 2024 4:53 am ET
3min read Amazon (AMZN) has been a dominant force in the tech industry for decades, consistently delivering strong performance and growth. Despite recent market fluctuations, Amazon remains a compelling investment opportunity. Here are two reasons why you should consider buying Amazon stock like there's no tomorrow.
1. Robust E-commerce and Cloud Computing Businesses
Amazon's core businesses – e-commerce and cloud computing – have been driving its growth and success. The e-commerce platform offers a vast range of products, from essentials to mass merchandise, catering to every shopping need. Meanwhile, Amazon Web Services (AWS) is the world's leading cloud services provider, offering a wide array of services, including analytics, data storage, and artificial intelligence (AI).
In the most recent quarter, these businesses generated more than $158 billion in sales and $15 billion in net income. Additionally, free cash flow and return on invested capital (ROIC) have been on the rise, indicating that Amazon has the resources to support future growth and has made wise investment decisions.
2. Optimized Cost Structure and AI Cloud Computing Growth
Amazon has successfully navigated challenges such as inflation and supply chain issues, optimizing its cost structure and returning to profitability. The company's investment in Anthropic and integration of the Claude AI chatbot into AWS position it at the forefront of AI cloud computing. This strategic move allows Amazon to stay ahead in the AI-related arms race with rivals like Microsoft and offer advanced AI services to its customers.
Amazon's advertising business is another significant driver of its overall revenue and valuation. In the third quarter of 2024, Amazon's ad sales rose 19% to $14.3 billion, more than $1.7 billion higher than its annual ad sales just five years ago. This growth has helped Amazon secure a 13.9% share of the U.S. digital ad market, projected to expand to 17.3% by 2026.
In conclusion, Amazon's strong performance in e-commerce and cloud computing, optimized cost structure, and AI cloud computing growth make it an attractive investment opportunity. Despite market fluctuations, Amazon's proven management and enduring business model make it a resilient choice for long-term investors.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
