Investors are increasingly drawn to Elon Musk’s ventures, particularly with the imminent IPO of SpaceX, which is valued between $1.75 trillion and $2 trillion. Tesla’s market cap recently peaked at $1.5 trillion but has since fallen to $1.25 trillion. Despite the hype surrounding Musk’s projects, including ambitious plans for AI and robotics, the current earnings from these companies remain modest, raising concerns about their long-term profitability.
In contrast, Amazon’s cloud division, AWS, is experiencing robust growth, with revenue up 28% year-over-year to $37.6 billion. Analysts project that AWS could generate $61.5 billion in operating income over the next year, significantly outpacing the combined earnings of Tesla and SpaceX. Additionally, Amazon’s North American retail segment is also gaining momentum, with a projected revenue increase that could push operating earnings to around $39 billion.
Given these dynamics, Amazon presents a more compelling investment opportunity compared to Musk’s ventures, with potential earnings exceeding $100 billion in the coming year, positioning it for a market cap increase to $3.25 trillion or more. Investors may want to reconsider their exposure to Tesla and SpaceX in favor of Amazon’s established earnings power.
Source: fool.com