Amazon.com Inc. shares have seen a small gain of 0.58%, reflecting a challenging first quarter with a loss of 11.95%. Despite this, analysts suggest it may be undervalued based on its current P/E ratio. The company's profitability is expected to be bolstered by its successful AWS segment and a new proprietary AI model, Nova, set to launch in June. Additional factors contributing to its revenue growth include strong advertising performance and retail holiday spending.
While certain business segments like smart home devices are lagging, others - namely AWS - are likely to contribute to the company being able to surpass $100 billion in operating income.
Amazon recently announced a plan to launch a proprietary AI model with advanced reasoning capabilities called Nova, intended to compete with ChatGPT and provide a price-efficient option.
During Amazon's fourth-quarter 2024 earnings call on Feb. 6, the company announced that its advertising revenue surged to $17.3 billion, representing 18% quarter-over-quarter growth.
The stock hit its all-time high of $242.52 on Feb. 4 in the lead-up to the Q4 earnings call, showcasing Amazon’s strong performance prior to valuation declines.
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