The S&P 500 remains near all-time highs, yet investors not focused on top-performing AI stocks are feeling the strain, particularly with Amazon (AMZN), which has stagnated around $200. Despite benefiting from the AI boom, Amazon’s stock has underperformed the index over the past five years, leaving many investors questioning its future. However, Amazon Web Services (AWS) is poised for significant growth, with a projected increase from $129 billion in revenue to $600 billion by 2036.
AWS’s revenue growth of 24% last quarter highlights its potential, while Amazon’s retail division is also thriving, reporting a 10% year-over-year revenue increase in North America. The combination of margin expansion and robust revenue opportunities positions Amazon for substantial earnings growth over the next decade, despite current cash flow concerns due to heavy investments.
For market professionals, the key takeaway is that Amazon’s stock could represent a compelling long-term investment. With a solid earnings growth story and a market cap of $2.2 trillion, patience may yield significant rewards for those willing to hold the stock.
Source: fool.com