Meet the Unstoppable Growth Stock That Just Hit a New All-Time High but Is Still an Unqualified Buy, According to Wall Street
The bull market that has captivated Wall Street is just entering its third year, turning in its best performance since 2011. It pushed the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite to record heights earlier this week.
One of the factors fueling this record run is recent advances in artificial intelligence (AI). The technology, which first burst on the scene in early 2023, is unlike anything that came before. Generative AI can not only streamline processes but also create original text and images, potentially increasing productivity and sending more profits to the bottom line.
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Investors might be surprised to learn that Amazon (NASDAQ: AMZN) has been using earlier forms of AI for decades, which gave the company a running start when AI came calling early last year. This history of deploying AI helped Amazon fashion the AI solutions it offers to customers. Add to that the company’s dominant positions in cloud computing and digital retail and its strong position in digital advertising, and you have a company that’s a quadruple threat in the tech industry.
Strong growth across its quartet of businesses has driven the stock to record heights, and according to Wall Street, this might just be the beginning.
There’s no denying the challenges of the past several years, marked by macroeconomic headwinds and decades-high inflation. Those conditions have recently given way to a robust recovery, with consumer sentiment hitting its highest point in more than six months. Additionally, the Federal Reserve Bank just announced the second in its ongoing series of interest rate cuts as the specter of inflation fades.
The rebound in the economy has helped drive improving results for Amazon. For the third quarter, revenue of $159 billion rose 11% year over year, while diluted earnings per share (EPS) of $1.43 jumped 52%.
Improvements from each of the company’s major operating segments helped drive the results. Online retail sales in North America increased 9%, while international sales climbed 12%. The reacceleration of Amazon Web Services (AWS) — the company’s cloud infrastructure service — continues, jumping 19%, its highest rate of growth since late 2022. Amazon also continued to make inroads in digital advertising, one of its fastest-growing segments, which increased 19%.
Amazon is unmatched in the online retail business it pioneered. The company captured 38% of U.S. e-commerce sales in 2023, more than its next 15 largest competitors combined, according to data provided by eMarketer. The company’s leadership is anticipated to continue this year, as Amazon is expected to account for 40% of online sales in the U.S. in 2024.
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