Amazon's stock surged 44% in 2024, significantly outperforming the S&P 500's 23% return. Its stock's long-term performance is driven more by operating income than by sales alone. Despite historical declines in stock price, Amazon has never reported a year-over-year drop in quarterly revenue, showcasing reliable upward momentum. The company's profitability has been propelled by robust performance in high-margin business segments like AWS and digital advertising. As of the third quarter of 2024, Amazon's operating income reached $47 billion, with expectations of hitting a record $63 billion for the year, contributing to its all-time high stock price.
In reality, this is what makes stocks go up over the long term, generally speaking. Companies with high cash-flow potential are worth more than companies with little cash-flow potential.
Amazon clearly was poised for robust profitability before 2024 even began. Two of the company's highest-margin revenue streams are from its cloud computing platform Amazon Web Services (AWS) and from digital advertising.
Collection
[
|
...
]