Amazon: Opportunities through strong growth in cloud and AI business

Thanks to its cloud division AWS, Amazon (NASDAQ:AMZN) is posting impressive profit growth and shows enormous potential for the future. In the last quarter, operating profit rose by more than 50% to $17.4 billion, exceeding expectations. This positive development is reflected in a strong increase in Amazon's share price and strengthens the company, which is now one of the most valuable in the world, with a market capitalisation of almost $2 trillion.
 
AWS as a success factor
 
The cloud division AWS remains a key profit driver for Amazon. In the third quarter, operating profit here grew by almost 50% to 10.4 billion dollars, while revenues rose by 20% to 27.5 billion dollars. AWS ensures Amazon a strong competitive position in the cloud market and offers numerous opportunities: in addition to stable revenue growth, Amazon benefits from the global demand for cloud solutions as more and more companies are moving their IT infrastructure to the cloud. AWS remains a driving force for the company's overall performance and is constantly opening up new business opportunities.
 
Investments in artificial intelligence as a growth lever
 
CEO Andy Jassy has announced extensive investments in the field of artificial intelligence. With a budget of 75 billion dollars for data centres and AI infrastructure, Amazon is focusing squarely on this future technology, which, according to Jassy, offers a ‘unique opportunity’. The planned investments optimally position Amazon to compete with Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) and could enable Amazon to play a leading role in the field of AI-based cloud services. Demand for AI applications is increasing worldwide, which gives AWS and thus Amazon additional tailwind.
 
Rising revenues in retail and advertising
 
Amazon also shows potential outside of the cloud business. The retail business and advertising revenues increased significantly, which shows that Amazon can continue to grow in its core business as well. In the current quarter, the company expects revenues of up to $188.5 billion and an operating profit of between $16 and $20 billion, which should further support the growth momentum.
 
And what does this mean for us as investors?
 
Amazon's share price fully reflects the company's positive performance. In the long term, we expect significant price gains. In the short term, the share price could fall back again somewhat. However, it is important that it does not fall below $180.25, as this would break the upward trend. Those planning to buy should stay on the sidelines now and take the opportunity. You can find a detailed analysis of Amazon, including the long-term outlook, on our website.
 
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