Amazon, founded by Jeff Bezos in 1994, began as an online bookstore but quickly expanded its product range. Over the years, it has grown into a global e-commerce juggernaut, offering a vast array of goods and services. Apart from retail, Amazon has several business segments, including Amazon Web Services (AWS), which provides cloud computing services; Amazon Prime, a subscription service offering numerous benefits like expedited shipping and exclusive content; and Amazon Studios, which produces original TV shows and movies.
Amazon’s business model is known for its customer-centric approach, vast logistics network, and continual innovation As of now, Amazon remains a dominant force in global e-commerce and technology.
Amazon is considered to be a growth stock because it has a history of strong revenue and earnings growth. The company’s e-commerce business is still growing rapidly, and it is also expanding into new areas such as cloud computing, advertising, and logistics. Amazon’s growth prospects are good for the long term, as it is well-positioned to capitalize on the continued growth of the digital economy.
Analysts are still bullish on the stock. The median price target for AMZN stock is $170, which represents a 23% upside from the current price.
There are a number of factors that are driving the optimism for AMZN stock. First, Amazon is still the leading e-commerce platform in the world. It has a massive customer base and a wide range of products and services.
Second, Amazon is investing heavily in new growth areas, such as cloud computing and advertising. These businesses are expected to drive significant growth in the coming years.
Third, Amazon is a very profitable company. It has a strong balance sheet and a history of returning capital to shareholders.
Overall, AMZN stock is a good investment for investors who are looking for a long-term growth play. The company is facing some challenges, but it is still the leading e-commerce platform in the world and it is investing heavily in new growth areas. Analysts are bullish on the stock and they believe that it has the potential to generate significant returns in the coming years.
Amazon’s revenue structure in 2023 is as follows:
- Online stores: This segment includes sales of products and services on Amazon’s website and mobile apps. It generated $220 billion in revenue in 2023, accounting for 42% of Amazon’s total revenue.
- Third-party seller services: This segment includes fees charged to third-party sellers who sell their products on Amazon’s marketplace. It generated $117 billion in revenue in 2023, accounting for 23% of Amazon’s total revenue.
- Amazon Web Services (AWS): This segment provides cloud computing services to businesses and organizations around the world. It generated $80 billion in revenue in 2023, accounting for 15% of Amazon’s total revenue.
- Advertising: This segment includes fees charged to businesses that advertise on Amazon’s websites and mobile apps. It generated $38 billion in revenue in 2023, accounting for 7% of Amazon’s total revenue.
- Subscription services: This segment includes fees charged for Amazon Prime, Amazon Music, Amazon Video, and other subscription services. It generated $35 billion in revenue in 2023, accounting for 7% of Amazon’s total revenue.
- Physical stores: This segment includes sales of products and services at Amazon’s physical stores, such as Whole Foods Market and Amazon Books. It generated $19 billion in revenue in 2023, accounting for 4% of Amazon’s total revenue.
- Other: This segment includes revenue from miscellaneous sources, such as Amazon’s hardware business and its investment in electric vehicle company Rivian. It generated $4 billion in revenue in 2023, accounting for 1% of Amazon’s total revenue.
Overall, Amazon’s revenue structure is heavily weighted towards its e-commerce business. However, the company is also growing its cloud computing business (AWS) and its advertising business. These two businesses are expected to continue to grow in the coming years, and they could eventually become more important to Amazon’s overall revenue than its e-commerce business.
As you can see, Amazon’s revenue structure in 2020 was quite different from its revenue structure in 2023. In 2020, Amazon’s e-commerce business (online stores) was its largest revenue source, generating 53% of total revenue.
Amazon’s subscription services and advertising products are a powerful combination that helps Amazon to reach more customers and grow its business. Amazon uses its subscription data to target its advertising products more effectively.
However, in 2023, Amazon’s cloud computing business (AWS) became its largest revenue source, generating 15% of total revenue. This is a reflection of the growth of the cloud computing market in recent years.
Amazon Web Services (AWS) is the clear leader in the cloud computing market, with a market share of over 33%. AWS offers a wide range of services, including compute, storage, networking, databases, analytics, machine learning, and artificial intelligence.
AWS currently has 26 regions and 84 availability zones in operation. These regions and availability zones are located throughout the United States, AWS GovCloud (US), Americas, Europe, Asia Pacific, as well as in the Middle East & Africa.
Amazon is investing heavily in AWS to maintain its leadership position in the cloud market. In 2022, Amazon announced plans to invest $5 billion in new AWS data centers in the United States and Europe. Amazon is also expanding its AWS services to new regions, such as Africa and the Middle East.
AWS is a key driver of Amazon’s growth and profitability. It is likely to continue to be a major growth driver for Amazon in the years to come.
there are a few areas that the company is investing in that could potentially lead to new growth opportunities. These include:
- Healthcare: Amazon is investing heavily in the healthcare industry. The company has acquired several healthcare companies, including PillPack, Health Navigator, and One Medical. Amazon is also developing its own healthcare products and services, such as the Amazon Care telemedicine service.
- Blockchain: Amazon is investing in blockchain technology. The company has created a blockchain team and is exploring how blockchain can be used to improve its products and services. For example, Amazon is using blockchain to track the supply chain of its products.
- Quantum computing: Amazon is investing in quantum computing. The company has created a quantum computing team and is working on developing quantum computers. Quantum computers have the potential to revolutionize many industries, including healthcare, finance, and logistics.
- Artificial intelligence (AI): Amazon is a leader in AI. The company uses AI to power its products and services, such as Amazon Alexa, Amazon Rekognition, and Amazon Translate. AI has the potential to revolutionize many industries, including retail, manufacturing, and transportation.
It is possible that one of these areas could become Amazon’s next new S curve. However, it is also possible that Amazon will find new growth opportunities in other areas that we cannot predict today. Amazon is a very innovative company, and it is always looking for new ways to grow.