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USA Today
4 days ago
- Business
- USA Today
Amazon Stock: Buy, Hold or Sell?
Amazon Stock: Buy, Hold or Sell? Amazon has the ingredients to keep growing for a while. After touching a multi-year low of around $84 in early 2023, Amazon's (NASDAQ: AMZN) stock price has more than doubled to $200 (as of this writing), thanks to the improvement in financials. As the company moves forward on tailwinds such as artificial intelligence (AI) and facing headwinds such as the e-commerce slowdown, investors may wonder: Is now the time to buy, hold, or sell Amazon stock? Let's take a closer look. How did Amazon perform in 2024? First, a review of Amazon's recent performance, focusing on its 2024 performance. Overall, it was a solid year for several reasons. Amazon expanded revenue by 11% to $638 billion, thanks to growth across all three major segments. North America was up by 10%, international was up by 9%, and Amazon Web Services (AWS) was up by 19%. While an 11% revenue growth rate is not unusually high, it is still remarkable considering the scale that Amazon operates in. Moreover, while its top-line growth was solid, the highlight of Amazon's performance in 2024 was the massive improvements in its bottom line. Operating profit jumped 86% from $36.9 billion to $68.6 billion, due to profit growth across all segments. The rapid margin expansion demonstrates the giant's strong execution capabilities in managing its costs and the benefits of operating leverage. Operationally, Amazon continued to improve delivery speeds, with more than 65% more items delivered to Prime members the same day or overnight than in the fourth quarter of 2023. It also launched Amazon Haul, a new ultra-low-price shopping service in the U.S., to compete against low-cost players like Temu and Shein. Similarly, in its cloud computing business (AWS), the tech company delivered good progress in 2024, such as introducing its new Trainium2 AI chip, establishing its foundation models in Amazon Nova, and creating new models and features in Amazon Bedrock that give customers flexibility and cost savings. All these innovations help position the company in the ongoing AI race. In other words, despite its size, the tech giant is still executing well to delight its users and maintain its share in key markets. What are Amazon's prospects in the coming years? Amazon might have become a household name thanks to the success of its e-commerce business, but the most significant growth drivers in the next few years will likely come from other segments. The biggest winner will likely be AWS, which rides on megatrends like AI advancement and the ongoing migration to the cloud. For instance, the global AI market is expected to grow from $294 billion in 2024 to $1.772 billion by 2032, a compound average growth rate of 29%. As the most significant cloud computing player globally with a 30% market share, AWS is primed to benefit from this once-in-a-generation trend. Another business gaining traction (which could accelerate further in the coming years) is Amazon's advertising business. Centered around Prime Video and Amazon Search, the advertising business generated $14 billion in revenue in the first quarter of 2025, up 18% year over year. This segment grew even faster than AWS (up 17% in the same quarter). Like AWS, advertising is a high-margin business, which will likely contribute to a margin expansion for the giant over time. Unlike the previous two businesses, the e-commerce segment could see a mixed performance in the coming years. On the positive end, Amazon can leverage its massive scale to gain market share from traditional brick-and-mortar shopping and expand in emerging markets like India. The downside is that it has to deal with the uncertainties of tariffs and emerging competitors like Temu and Shein. So, while Amazon is still favorably positioned to grow its e-commerce business, the e-commerce prospects will not be as straightforward as those of AWS and the advertising business. Still, while the prospects may differ for Amazon's various business segments, it is essential to highlight that the company has an unusual culture centered around its "Day 1" mentality. This mentality focuses on customer obsession, embracing new trends, willingness to experiment and fail, and avoiding bureaucracy. As long as the company can maintain this culture, it is well-positioned to continue growing in the years to come, albeit at a slower pace, given its already enormous size. Is Amazon's stock cheap? Here's another factor that investors should consider before making a move in Amazon's stock: The stock valuation in relation to its past. Here, let's use price-to-sales (P/S) as a proxy. Amazon's P/S ratio has ranged from 1.7 to 4.6 times in the last five years. As of this writing, it is 3.3 times, just around the middle of that range. The current valuation suggests that while Amazon's stock is not a bargain today, it is not excessively priced compared to its past valuation. What it means for investors Amazon delivered strong results in 2024, highlighting the strength of its execution capabilities. Its high-margin segments – AWS and advertising – will drive future growth, supported by trends like AI adoption. While e-commerce faces mixed prospects, Amazon's Day 1 culture will likely keep it competitive for the foreseeable future. So, while the stock is not a screaming buy today, it is not a sell. Existing investors should hold on to the stock, while investors with a long-term horizon could consider buying a small position and adding to that position over time. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Amazon right now? Offer from the Motley Fool: Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you'd have $651,049!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you'd have $828,224!* Now, it's worth notingStock Advisor's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you joinStock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Time of India
09-05-2025
- Business
- Time of India
AWS expanding AI offerings, developing dedicated industry solutions
Amazon Web Services (AWS) is expanding its AI offerings to position itself as a key enabler for organisations looking to harness generative Artificial Intelligence and advanced cloud solutions. According to a company official, it is clear that one foundation model would not fit every use case, even as the adoption of generative AI is accelerating. On the sidelines of the AWS Summit here, Head of Solution Architecture at AWS India and South Asia, Satinder Pal Singh said, "Our investments and operations in India are enabling customers of all segments to experiment and build technology applications and platforms, re-invent industries and their business models, and power their growth." AWS is continuously expanding the breadth of models available on Amazon Bedrock based on customer feedback, he said, adding that with the introduction of Amazon Nova, AWS now offers a new generation of foundation models that deliver multimodal intelligence and content creation capabilities. Singh believes that while generative AI is transforming how information is created and analysed, the rise of agentic AI will fundamentally reshape the nature of work itself. Further, he noted that this rapid transformation will be fuelled by upskilling the workforce with future-ready skills. "Skilling workforce with future skills will continue to be a priority for all businesses. Across India, the need for urgent digital skills training remains a key priority for industry and government. AWS has trained over 5.9 million individuals in India on cloud skills since 2017," he said. AWS established its presence in India in 2011 and has Zepto, Paytm , Razorpay and SonyLIV, among others, as its clientele. The firm has committed to invest $16.4 billion (about Rs 13,87,25 crore) by 2030 to fuel growth and digital transformation in India.
Time of India
09-05-2025
- Business
- Time of India
AWS expanding AI offerings, developing dedicated industry solutions
Amazon Web Services (AWS) is expanding its AI offerings to position itself as a key enabler for organisations looking to harness generative Artificial Intelligence and advanced cloud solutions. According to a company official, it is clear that one foundation model would not fit every use case, even as the adoption of generative AI is accelerating. On the sidelines of the AWS Summit here, Head of Solution Architecture at AWS India and South Asia, Satinder Pal Singh said, "Our investments and operations in India are enabling customers of all segments to experiment and build technology applications and platforms, re-invent industries and their business models, and power their growth." AWS is continuously expanding the breadth of models available on Amazon Bedrock based on customer feedback, he said, adding that with the introduction of Amazon Nova, AWS now offers a new generation of foundation models that deliver multimodal intelligence and content creation capabilities. Singh believes that while generative AI is transforming how information is created and analysed, the rise of agentic AI will fundamentally reshape the nature of work itself. Further, he noted that this rapid transformation will be fuelled by upskilling the workforce with future-ready skills. "Skilling workforce with future skills will continue to be a priority for all businesses. Across India, the need for urgent digital skills training remains a key priority for industry and government. AWS has trained over 5.9 million individuals in India on cloud skills since 2017," he said. AWS established its presence in India in 2011 and has Zepto, Paytm , Razorpay and SonyLIV, among others, as its clientele. The firm has committed to invest $16.4 billion (about Rs 13,87,25 crore) by 2030 to fuel growth and digital transformation in India.
Qatar Tribune
03-05-2025
- Business
- Qatar Tribune
Amazon up, outlook down
Agencies Amazon reported a nine percent rise in first-quarter revenue on Thursday, but its outlook fell below expectations, sending its share price lower. The online retail behemoth said sales hit $155.7 billion in the January-to-March period, but its share price dropped as much as four percent in after-hours trading on Wall Street. Amazon Web Services, the company's hugely successful cloud business, saw sales jump 17 percent to $29.3 billion'We're pleased with the start to 2025, especially our pace of innovation and progress in continuing to improve customer experiences,' CEO Andy Jassy said, highlighting new AI offerings including the next-generation Alexa+ virtual assistant. Amazon said it had launched several AI initiatives during the quarter, including Amazon Nova generative AI models, while expanding its Project Kuiper satellite network to compete with Elon Musk's Starlink. Looking ahead, Amazon forecast second-quarter net sales between $159 billion and $164 billion, representing growth of seven to 11 percent. But this was lower than what analysts had expected. The outlook is especially sensitive for investors with speculation high on how the wave of high trade tariffs announced by President Donald Trump's administration will affect Amazon's performance.
Malay Mail
02-05-2025
- Business
- Malay Mail
Amazon's cloud growth outpaces sales, but trade tensions cool investor optimism
SAN FRANCISCO, May 2 — Amazon reported a nine per cent rise in first-quarter revenue yesterday, but its outlook fell below expectations as potential impact from the US-China trade war rattled investors. The online retail behemoth said sales hit US$155.7 billion (RM671.2 billion) in the January-to-March period, but its share price dropped as much as four per cent in after-hours trading on Wall Street. Amazon Web Services, the company's hugely successful cloud business, saw sales jump 17 per cent to US$29.3 billion, but the gain was slightly below expectations. 'We're pleased with the start to 2025, especially our pace of innovation and progress in continuing to improve customer experiences,' CEO Andy Jassy said, highlighting new AI offerings including the next-generation Alexa+ virtual assistant. Amazon said it had launched several AI initiatives during the quarter, including Amazon Nova generative AI models, while expanding its Project Kuiper satellite network to compete with Elon Musk's Starlink. Looking ahead, Amazon forecast second-quarter net sales between US$159 billion and US$164 billion, representing solid growth of seven to 11 per cent. But this was lower than what analysts had expected. The outlook is especially sensitive for investors with speculation high on how the wave of high trade tariffs announced by President Donald Trump's administration will affect Amazon's performance. Trump has most notably slapped 145 per cent levies on China, where many US-bound products are made, though he as given exceptions on electronics and other items for now. There is also uncertainty around whether tariffs will slow spending -- the US economy already showed a contraction in the first quarter of the year. Jassy said the company had yet to see any reduction in demand since Trump announced his tariffs a month ago even if 'to some extent, we've seen some heightened buying in certain categories' as shoppers anticipate price hikes. Still, 'most sellers (on Amazon) just haven't changed pricing yet,' he added, while insisting that Amazon wasn't particularly exposed to China. A report earlier in the week that Amazon was going to display the extra cost of the levies for customers on its platform drew a furious response from the White House. Amazon executive chairman Jeff Bezos called Trump to defuse the drama, and the company quickly said it had no intention of executing the plan. Advertising, usually dominated by rivals Google and Meta, was a bright spot in the quarter with sales up 19 per cent year-on-year. — AFP
