Amazon’s stock remains below its previous highs, but its business model has shifted significantly, focusing on cloud computing through AWS, AI, retail, and advertising. AWS revenue grew 37% in Q2, with a backlog of $496 billion and potential to become a trillion-dollar revenue business. Advertising revenue also grew 26%, supporting diversified growth. Despite concerns over cash flow and increased capital expenditure, Amazon’s operating income and cash flow are strong, with management optimistic about cloud adoption growth. The stock trades at a reasonable forward P/E of 24, making it attractive compared to competitors like Walmart and Microsoft. Amazon’s future growth is driven by expanding AI infrastructure and cloud services, making it a compelling buy for long-term investors.
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