Amazon (AMZN +1.25%) continues to demonstrate its prowess in building dominant business units, particularly in e-commerce and cloud computing. Recently, the company reported a 17% revenue increase to $181 billion and $30 billion in net income, largely bolstered by the success of Amazon Web Services (AWS). The AI boom has significantly accelerated AWS’s growth, pushing its annual revenue run rate to $150 billion, with a robust portfolio of AI-focused products and services.
Looking ahead, Amazon’s potential next big move may lie in establishing a stand-alone chip business. Currently, AWS offers proprietary chips like Graviton and Trainium, which have seen soaring demand, with Trainium boasting a 30% better price performance than standard GPUs. CEO Andy Jassy hinted at the possibility of selling these chips to third parties, a move that could potentially increase annual revenue from $20 billion to $50 billion.
For market professionals, this anticipated shift represents a compelling opportunity. Investing in Amazon now could position portfolios favorably as the company seeks to replicate its past successes in new, high-growth areas.
Source: fool.com