Amazon (NASDAQ: AMZN) just announced some blockbuster results to kick off its holiday shopping season — and Wall Street shrugged. Shares didn’t budge in response to the e-commerce giant’s late November update describing sales trends through Cyber Monday.

Amazon said it sold a record 1 billion items, including millions of its own tech devices, over that 11-day stretch. Shoppers are motivated by deals and convenient shipping right now, and they are spending freely on Amazon products and on products sold by third-party sellers .

Investors have bigger things on their minds, though. Let’s look at why shareholders might have looked past this good news for Amazon’s e-commerce division.

Services are the future

Amazon is a massive player in the e-commerce industry, but that’s not the niche that investors are most excited about. The services division, home to AWS and other huge segments like Prime subscriptions, is where most of the growth is coming from these days. Net product sales are up just 4% in the nine months that ended in late September, but the services division is up 18 % in that time.

The services segment accounts for most of the overall business today, too, at 56% compared to the product division’s 44%. It’s no doubt that Amazon is a huge force in e-commerce sales, and growth here supports gains in other areas like Prime subscriptions and advertising. But the company’s future is increasingly tied to its cloud services platform.

Past gains

Don’t forget that Amazon’s stock is already trouncing the market. Shares are up over 70% so far in 2023 compared to the 19% increase that investors have seen in the S&P 500 index. Amazon’s returns are roughly double that of the soaring Nasdaq Composite Index this year. It would take some big positive surprises to push the stock higher in that context, and this sales update didn’t meet that threshold.

Amazon’s Black Friday report was also light on concrete sales figures. We don’t know the revenue number that goes along with those 1 billion product sales, for example. And management didn’t offer more specifics than to say that “millions” of new Prime subscribers joined in conjunction with the deal event. Investors learned that sales volumes set a record this year, but shareholders will have to wait until the fourth-quarter earnings report in early February to get the full picture on holiday sales and profit figures. You can expect bigger stock price swings around that announcement.

Looking toward 2024

In the meantime, there will be several updates on the health of consumer spending patterns as we progress through the holiday season. But don’t expect Amazon’s stock to move wildly in response to these reports.

Investors are more focused on the company’s cloud services, and on its improving profitability and cash flow trends heading into late 2023. The surest way for the stock to extend its positive momentum from here is for Amazon to keep winning market share in the AWS unit and allowing those gains to lift cash flow over the coming quarters. It’s good news for the business, then, that investors can look right past these blockbuster e-commerce sales toward brighter news ahead for 2024 and beyond.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Demitri Kalogeropoulos has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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Original: AMZN Feed: Here’s Why Investors Don’t Care That Amazon Just Sold 1 Billion Products