U.S. e-commerce giant Amazon’s (NASDAQ:AMZN) fourth-quarter results soared past expectations. The company’s North American revenues reached $105.5 billion, representing a 13% year-over-year boost. The company’s beat can be attributed to enhanced logistics, which decreased delivery times and costs. At the same time, the cloud division can thank AI advancements. This AMZN stock analysis will shine a light on its achievements.
Amazon now foresees Q1 sales of $138-$143.5 billion on the horizon, surpassing analyst estimates. Andy Jassy, the CEO, has brought down costs to reflect a $10.6 billion net income. Even with cost cuts and layoffs, Amazon is sticking to its cautious investment course for 2024.
Here’s more on why Amazon remains the premier e-commerce company investors should want to consider.
Amazon is More Than Just E-Commerce
Amazon, with $87 billion in assets, avoids dividend distributions. Instead, the company continues to aggressively reinvest profits across key ventures like AWS and retail expansion. This is an approach that is completely different from other mega-cap tech stocks, making Amazon stand out. The company’s multifaceted business is one of the key reasons the company is able to pursue such strategies.
Indeed, Amazon’s core e-commerce business is what the company is known for. However, AWS (its cloud segment), advertising, and an increasingly intriguing suite of AI integrations make Amazon a tech giant that’s difficult to contrast with any other stock on the planet. The company’s focus on digital advertising, third-party marketplaces, and streaming could position the company well to take over a dominant position in other lucrative industries. This is all while dominating the world of online retail, a sector Amazon has continued to remain #1 in for decades. This is a central part of this AMZN stock analysis.
Despite speedbumps like the Fire Phone and Amazon Wallet, Amazon’s growth and expansion have driven 14% revenue growth to $170 billion in Q4, beating expectations. Additionally, AWS reached the $24.2 billion mark, meeting forecasts thanks to growing AI product interest.
Robust Growth
Amazon lords over the U.S. e-commerce with its vast scale and logistics. Its Prime Video ranks third in daily TV viewing, using its first-mover edge and powers of fast shipping.
It’s the third giant digital ad platform. It also benefits from the trend of cutting cable cors, using vast website traffic and AWS sales growth. With its AWS sales at 13%, it’s positioned as Amzaon’s main growth booster in the expanding cloud market. It’s hoping to reach $1.6 trillion by 2030.
Amazon’s generative AI services have grown, but the company expects larger revenue volumes in the coming years. Dropping the curtain on Rufus, an AI shopping assistant, and a 27% sales increase to $14.7 billion in advertising units have helped this growth. Added on by revenue from ads on Prime Video, Amazon is aiming to maintain low ad loads.
Does Insider Selling Mean Retail Investors Should Be Worried
Perhaps the biggest Amazon news to hit the tape in recent weeks has been that Jeff Bezos sold over 20 million Amazon shares. This move appears to be a part of a stock-selling plan, in which the former Amazon CEO would avoid sales tax (via moving to Florida from Washington State). This sale marks Bezo’s first since November 2021, yet he still retains 3.6% Amazon ownership following the transactions.
Bezos has made plans to sell up to 50 million Amazon shares by January 31, 2025. The former CEO has used a predetermined process to ease tax burdens and comply with the SEC’s 10b5-1 rule. Thus, for many investors, there’s nothing to see here.
However, Bezos’ rather impeccable timing with stock sales could signal to the market that the stock is reaching levels he’s uncomfortable with. I’m not sure that’s the case, but it’s certainly a factor for cautious investors to consider.
AMZN Stock Remains a Long-Term Buy
In my view, Amazon remains among the top mega-cap tech stocks investors should consider in this environment. Yes, Amazon trades at a premium to many of its “Magnificent 7” peers. However, the company’s market-beating growth rate means the stock should trade at a premium.
For those looking for e-commerce exposure, as well as exposure to the myriad of other businesses Amazon is involved in, this stock is a top pick right now.
Amazon’s intrinsic value of $241.39 raises an attractive flag for investors, with a high beta indicating significant price fluctuations. Anticipated earning doubling lights the eyes for optimistic growth prospects. This concludes this AMZN stock analysis.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.