Amazon is expected to continue to excel in the market due to various factors

From Nasdaq: 2024-10-04 07:15:00

Amazon (NASDAQ: AMZN) has been a top performer in the market, with a 47% rise over the past year and a 1,060% increase in the past decade. Despite past success, the focus is now on the future. Reasons to invest in Amazon include improving commerce margins, strong growth in advertising services, AI fueling AWS growth, AWS boosting Amazon’s margins, and massive free-cash-flow generation.

Amazon’s commerce margins have been improving, with North American operating margin up to 5.6% in Q2. Advertising services within Amazon have shown strong growth, with year-over-year growth of at least 20% since Q1 2023. AWS, Amazon’s cloud computing business, has seen growth with a 19% revenue increase in Q2.

AWS accounted for 64% of Amazon’s total operating income in Q2. With the cloud computing market projected to increase from $680 billion to $1.44 trillion by 2029, AWS is positioned for significant growth. Amazon has been generating record free-cash-flow levels, allowing them to pursue investment opportunities.

The Motley Fool Stock Advisor recommends 10 stocks for investors to buy, but Amazon is not on the list. Investing $1,000 in one of their previous picks, Nvidia, would have resulted in $752,838. Stock Advisor provides guidance on building a successful portfolio with regular updates and new stock picks each month. John Mackey and Randi Zuckerberg, among others, have positions in Amazon and Meta Platforms.



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