I use on November 30, 2022, as an unofficial beginning of the Revolution of Artificial Intelligence (IA). It is the day Openai published Chatgpt to the general public.
Since Chatgpt has become a part of the dominant culture, the S&P 500(Snpindex: ^ GSPC)And Nasdaq Composite(Nasdaqindex: ^ xicic) index Having several peaks won – thanks in large part to the actions of Megacap technology, testify to parabolic increases. Among the largest capital market winners were “Magnificent seven“Stocks.
In this cohort, Nvidia And Meta-platforms were the best performers of a mile – winning 601% and 409%, respectively, to date (March 17).
Third place is electronic commerce and the Cloud Computing leader Amazon(Nasdaq: Amzn)whose stock has exploded 102% from the chatgpt release. Although this yield is multiple higher than the earnings observed through the S&P 500 and the Nasdaq, I think that even better days are in advance for Amazon.
Let’s explore how Amazon makes waves in the AI arena and analyze how business investments in technology are already bearing fruit. In addition, I will review Amazon’s assessment and assert why I think it’s the perfect time to buy the hand on my fist and prepare to hold in the long term.
While companies like Nvidia, MicrosoftAnd Tesla Responding to a large part of the attention surrounding the AI story, Amazon has quietly made its own major movements.
To begin with, the company has invested $ 8 billion in a loved one in Openai called Anthropic. As part of their alliance, Anthropic Training of its generative AI models on Amazon’s cloud infrastructure. In addition, the AI developer also operates the personalized trainium and infrentia chips of Amazon – a decision which, I think, could be competitive in Nvidia and its giant of the graphic processing unit (GPU) on the road.
Since Amazon has teamed up with Anthropic in September 2023, the company witnessed Significant acceleration in its cloud activity – Amazon Web Services (AWS). To add color here, revenues in AWS increased by 13% per year in the fourth quarter by 2023 while increasing operating income by 39% from one year to the next.
However, in the fourth quarter of 2024, AWS increased by 19% from one year to the next and widened the growth of its operating income to 48%.
Although all of this is encouraging, Amazon does not seem to rest on his laurels. According to various company press releases, Amazon plans to spend more than $ 30 billion in data centers in Georgia, Ohio, Mississippi and Mexico in the coming years.
For me, there is an interesting cycle in play here insofar as the integration of Ama Amaton through AWS leads to coherent growth in cash flows, which the company then immediately reinvested in services supplied by AI.
Finally, apart from flea technology, cloud infrastructure and data centers, Amazon also invested massively in AI robotics, in particular, robotics which is implemented in the company’s warehouses in order to automate the realization processes. I think it is a wise choice of Amazon, because the company could be able to unlock significant efficiency in the electronic commerce sector, supplementing the expanded margins already seen in the Cloud segment.
Image source: Getty Images.
Nvidia has been the darling of the AI revolution so far, and although I think that the future of the company is brilliant, I have doubts as to whether Nvidia’s actions can go up several hundred percentage points over the next 10 years. At one point, Nvidia’s growth will probably show signs of slowdown – especially since more competing chips are starting to unravel the scene.
On the other hand, I think that the growth phase of Amazon AI is still in its first sleeves. The company has several different projects, and management seems very concentrated on a lucrative combination of accelerating income and improving beneficiary margins in large parts of the company – namely electronic commerce and AWS.
Nevertheless, Amazon is negotiated at only 31 times the estimates of long -term profits. As illustrated by the graph below, the Multiple P / E advance of Amazon is considerably updated compared to the quinquennial average of the company and oscillates around its lowest levels in more than a year.
Given the current growth rate of the company and potential store gains as AI becomes more of the Amazon ecosystem, I consider current assessments of evaluation as a formidable buying opportunity. Investors looking for a healthy combination of coherent growth and profitability might want to consider the purchase of Amazon shares now and prepare to hang on.
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Adam Spatacco At positions in Amazon, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool has positions and recommends Amazon, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.
