Peter Smith
⬤ Amazon.com Inc. stock has barely moved over the past twelve months, trading around $230 per share with just a 0.6% gain despite periodic ups and downs. This sideways action has puzzled many observers, especially considering the company's strengthening fundamentals across its most profitable divisions.
⬤ Amazon Web Services accelerated to roughly 20% growth during this period, cementing its position as a revenue powerhouse. AWS continues dominating enterprise cloud infrastructure across multiple industries. Meanwhile, Amazon's advertising business exploded even faster, posting about 24% year-over-year growth as brands pour more money into Amazon's retail and media ecosystem.
⬤ These high-margin segments have driven net margin expansion throughout the company. The combination of accelerating services revenue and improved operational efficiency has boosted profitability noticeably. Yet the stock price hasn't budged from levels seen twelve months ago, creating a disconnect between business performance and market valuation.
⬤ This gap between Amazon's operational momentum and stock performance has sparked debate among market watchers. With AWS accelerating, ad revenue surging, and margins expanding, the flat valuation suggests investors remain cautious about large-cap tech companies amid uncertain growth expectations and shifting macroeconomic conditions.
Peter Smith
