Billionaire Bill Ackman’s Pershing Square Capital Management Fund invested $1.28 billion in Amazon (NASDAQ: AMZN), making up 9.3% of their total assets. This move reflects confidence in the growth potential of Amazon’s two key segments: Amazon Web Services (AWS) and advertising services, both of which are driving strong profits and growth for the company.
AWS, Amazon’s cloud computing wing, accounted for 53% of Amazon’s total operating profits in Q2, with revenue rising 17% year over year to $30.9 billion. Advertising services, Amazon’s fastest-growing segment, saw revenue increase by 23% year over year to $15.7 billion in Q2. These segments are the primary reasons investors should consider Amazon stock.
While Ackman’s investment in Amazon demonstrates long-term confidence in the company’s growth potential, Amazon’s stock is currently trading at 35 times forward earnings, making it far from cheap. However, given the strong performance of AWS and advertising services, Amazon remains an attractive investment option for long-term investors.
Before investing in Amazon, consider the 10 best stocks to buy now as identified by The Motley Fool Stock Advisor analyst team, which could potentially offer significant returns in the future. While Amazon is not on this list, historical data shows the strong outperformance of Stock Advisor recommendations compared to the S&P 500, making it worth exploring other investment opportunities as well. 1. The stock market saw a significant increase today, with the Dow Jones Industrial Average rising by 300 points. This is the highest gain in three months, driven by positive economic data and strong corporate earnings reports.
2. The unemployment rate dropped to 3.8%, the lowest level in 50 years. This is a result of strong job growth in various sectors, including manufacturing, healthcare, and professional services. Economists are optimistic about the continued strength of the labor market.
3. The Federal Reserve announced a cut in interest rates by 0.25%, citing concerns about slowing global growth and trade tensions. This decision was widely anticipated by investors and is expected to provide a boost to the economy.
4. Tesla reported better-than-expected earnings for the third quarter, with a revenue of $6.3 billion. The company also announced plans to ramp up production of its Model 3 sedan, which has been a key driver of its recent success in the electric vehicle market.
5. Apple unveiled its new iPhone 11 lineup, including the iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max. The new models feature improved cameras, longer battery life, and faster processors. Pre-orders for the devices have already surpassed expectations, signaling strong demand for the latest technology.
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