![]() So now, if you want to upload a lot of data to Amazon’s cloud, the company will drive a truck to your office, fill it with data, then drive it back. The companies that work with AWS move so much information around that sometimes the internet simply cannot cope. AWS is large enough that Netflix, a company that accounts for around a third of all internet traffic in North America, is just another customer.ĪWS is large enough that in 2016 the company released the “Snowmobile”, a literal truck for moving data. The business is now 10% of Amazon’s overall revenue, making so much money that financial regulations forced the company to report it as a top-level division in its own right: Amazon divides its company into “US and Canada”, “International”, and “AWS”.ĪWS is large enough that it is dealt with on the same tier as the entire rest of the world. And that approach needed to cover everything.įrom there, it was almost an afterthought to take the obvious next step, and let others use the same technology that Amazon made available internally. If that dashboard didn’t exist, it needed to be created. If an advertising team needed some data on shoe sales to decide how best to spend their resources, they could not email analytics and ask for it they needed to go to the analytics dashboard themselves and get it. Every team, Bezos ordered, should begin to work with each other only in a structured, systematic way. ![]() It started, like so many things at Amazon, with an edict from the top. That’s the division of Amazon that provides cloud computing services, both internally and for other companies – including those that are competitors to Amazon in other areas (both Netflix and Tesco use the platform, for instance, despite Amazon also selling streaming video and groceries). Perhaps the best example of that approach in action is the birth and growth of AWS (previously called Amazon Web Services). Photograph: Ralph Freso / Reuters/Reuters And if you like to capitalize on market irrationality, then this is exactly what you’re looking for.Amazon’s distribution centre in Phoenix, Arizona. Therefore, the flash crash in the AMZN stock price seems irrational. Furthermore, the company reported second-quarter earnings per share of $15.12, and that’s significantly higher than the consensus estimate of $12.22.īesides, Amazon’s most recent Prime Day was absolutely outstanding, as more than 250 million items were sold during that event. Personally, I’m not disappointed at all by Amazon’s quarterly revenues. Thus, the $113.1 billion in revenues apparently wasn’t good enough, as it missed the analysts’ consensus estimate of $115.1 billion. That should be something to celebrate, as it represents a 27% year-over-year increase over an already mind-blowing dollar amount.īut again, people have become spoiled by Amazon’s past performances. So, let’s clear the air and break down the actual numbers.įor the second quarter of 2021, Amazon posted $113.1 billion in revenues. Meanwhile, for the second quarter of 2021, Amazon delivered perfectly acceptable results – or so it would seem, if our expectations are reasonable. “Over the past 18 months, our consumer business has been called on to deliver an unprecedented number of items,” Amazon CEO Andy Jassy said. After all, practically everybody and his uncle uses Amazon nowadays. Perhaps I can’t blame people for having sky-high expectations. It seems that both the analysts and the investors have become spoiled, or at least jaded, by Amazon’s powerful growth trajectory. Yet, even an e-commerce leviathan like Amazon can only grow so fast, for so long. Just as shoppers have flooded Amazon with orders for all kinds of goods, investors have demanded that the company deliver mind-blowing fiscal stats, quarter after quarter. What the heck happened there? Called On to Deliver Just maybe, then, the high cost of entry is justifiable.īut let’s focus now on the share-price drop from $3,600 to $3,300 that happened not long ago. ![]() This is probably less bloated than some investors might have expected.Īnd so, you’ve got a $3,000+ stock, but also a company that’s earning money hand over fist. In fact, Amazon’s trailing 12-month price-earnings ratio is 58.4. That’s a whole other can of worms, but to summarize my point, call options can allow investors to participate in the upside of expensive stocks with a relatively small amount of capital.Īnother point I’d like to make is that AMZN stock isn’t trading at a horrendously high multiple. One way that smaller accounts can take a position in this pricey stock is through call options. 7 Materials Stocks Ready to Supply the Infrastructure Boom.AMZN stock has traded near or above the $3,000 level for a full year now, if you can believe it. And when I say “expensive,” I’m not exaggerating. ![]()
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