Amazon stock is performing well across different business segments, with strong financials and growth potential.

From Morningstar: 2024-07-24 06:13:00

In the first quarter, cloud workloads shift from cost containment to growth, with larger and longer deals.

Generative AI becomes a multi-billion-dollar business with Amazon planning increased capex to meet demand, a significant player in the AI industry.

Amazon’s core e-commerce excels with improving margins and faster delivery times for Prime members, capturing consumer trends across different regions.

Advertising revenue grows by 24%, driven by sponsored ads and the potential of Prime Video ads over the next few years.

Morningstar values Amazon’s stock at $193 with a 3-star rating, expecting increased free cash flow as the company matures and expands internationally.

Amazon’s wide economic moat stems from network effects, cost advantages, and intangible assets, reflected in the success of its retail, AWS, and advertising segments.

Financially sound, Amazon’s revenue grows, margins expand, and it maintains a strong balance sheet with a focused growth strategy across different business segments.

High Uncertainty Rating for Amazon as it navigates risks like maintaining e-commerce leadership, driving continued investments, and managing regulatory challenges.

Bulls emphasize Amazon’s e-commerce dominance, advertising, and AWS growth, bolstered by Prime memberships and network effects.

Bears cite rising regulatory concerns, potential cash flow dampening from new investments, and challenges in penetrating certain markets as risks for Amazon’s future success.



Read more at Morningstar: Going into Earnings, is Amazon Stock a Buy, a Sell,…