Amazon (NASDAQ:AMZN) stock is on a winning streak, with its North American e-commerce business experiencing rapid growth last quarter. Notably, both its North American e-commerce unit and its cloud business achieved multi-year highs in operating income. With these positive catalysts in mind, I recommend that investors consider buying AMZN stock.
The revenue of Amazon’s flagship North America e-commerce business increased by 11% compared to the same period last year, while the unit’s operating income reached $4.3 billion, a significant improvement from the operating loss of $400 million reported in Q3 of 2022. Additionally, the company’s cloud business, AWS, saw a 12% year-over-year rise in revenue, with a more impressive 30% increase in operating income.
Overall, Amazon’s operating income soared by an incredible 448% year-over-year to $11.2 billion, up from $7.7 billion in Q2. This remarkable profitability can be attributed to the cost-cutting measures implemented by CEO Andy Jassy.
During Amazon’s Q3 earnings call, management shared positive feedback from customers regarding two of the company’s main AI offerings, Bedrock and CodeWhisperer. Bedrock allows companies to easily select the AI technology they need for each task, while CodeWhisperer simplifies computer programming for firms. Given the potential of AI to reduce costs for businesses, I believe it will play a significant role in driving AMZN stock’s growth in the near future.
Furthermore, management noted an increased willingness among firms to invest in AWS, which is an encouraging sign. Looking ahead, I believe Amazon has the potential to disrupt the pharmaceutical sector by reducing retail costs of drugs through the elimination of overhead and middlemen.
Lastly, as Americans allocate more of their spending towards goods rather than travel, I anticipate a strong acceleration in Amazon’s North American e-commerce business.
Please note that Larry Ramer, the author of this article, does not hold any positions in the mentioned securities. The opinions expressed in this article are solely those of the writer and are subject to InvestorPlace.com Publishing Guidelines.
Larry Ramer has been conducting research and writing articles on U.S. stocks for 15 years, with previous employment at The Fly and Israel’s largest business newspaper, Globes. He has been writing columns for InvestorPlace since 2015, and his contrarian picks, including PLUG, XOM, and solar stocks, have been highly successful. You can connect with him on Stocktwits at @larryramer.
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