Amazon has seen strong growth in recent years, bouncing back from a 50% decline in 2022 to now boasting a 123% gain since the start of 2023. The company has benefited from cost-cutting measures and lower inflation, allowing it to invest heavily in emerging sectors like artificial intelligence and digital advertising. With a price-to-sales ratio of around 3, Amazon is considered a bargain compared to its competitors.
The retail giant’s retail growth has been outstanding, with its North American and international segments experiencing significant revenue growth over the past year. In the first quarter of this year, Amazon’s revenue rose 13% year over year, with operating income improving significantly from the previous year. Additionally, Amazon has entered the digital advertising market through its Prime Video platform, with revenue from advertising services increasing by 25% in the first quarter.
Amazon’s strong financial position has been bolstered by gains in its e-commerce, retail, and cloud business segments. AWS operating revenue nearly doubled in the first quarter of this year, representing over 60% of the company’s total operating revenue. With a leading market share in cloud infrastructure and investments in AI technology, Amazon is poised for further growth in the high-growth AI market.
Despite a 95% increase in its stock price over the past five years, Amazon’s growth catalysts across multiple markets suggest that it could perform even better in the years to come. With its current low price-to-sales ratio, Amazon is considered a worthwhile investment opportunity. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, sits on The Motley Fool’s board of directors, which ranks and recommends Amazon, Netflix, and Warner Bros. Discovery. The Motley Fool upholds a disclosure policy.
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