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Amazon's Impressive Earnings Report: A Beacon of Growth and Profitability

Hey there, folks! Let's talk about Amazon and its recent earnings report. It's been a bit of a rollercoaster, but trust me, it's ending on a high note.

Amazon's Remarkable Turnaround

Amazon has come a long way, hasn't it? Remember when everyone was worried about their profitability? Well, not anymore. This time, Amazon is showing off some solid numbers, and it's all about turning things around.

Amazon Web Services (AWS), which had its growth stumbling, is back on track, and the operating margins are looking healthier. Retail is also doing a victory lap with improved profitability, especially in North America. Sure, they might be losing a bit on package delivery, but they're making it up with their advertising business, which, by the way, is now the third-largest in the US, bringing in a whopping $44 billion in the last 12 months.

Cash Flow from Advertising

Speaking of advertising, it's been the dark horse in Amazon's revenue streams. Would you believe they've had a 25% year-over-year growth in this department? That's some serious cash coming in. And here's the deal: as long as more people keep selling stuff on Amazon, advertising is going to keep growing. Amazon is opening up new advertising opportunities on Prime Video and Alexa, so there are plenty of avenues to make that ad money.

The Amazon Flywheel

Now, let's talk about the Amazon flywheel. You might be wondering what that is, right? Well, it's their secret sauce. Amazon's super-speedy shipping times are like catnip for customers and sellers. More sellers want in on that action, and that's where the flywheel effect comes into play. It's like a self-sustaining cycle of growth.

Amazon's retail, AWS, and advertising businesses are all benefitting from this flywheel effect. More sellers need for advertising to stand out, and that's music to Amazon's ears. This whole thing is pushing up their profitability and cash flow faster than ever.

In a nutshell, Amazon's earnings report is a testament to its ability to evolve and thrive. They're diversifying their income streams, with advertising taking center stage, and they're capitalizing on their ace in the hole: unbeatable shipping times. Amazon is looking good, and investors are taking notice. The future seems pretty bright for this e-commerce titan.

Our 2 cents...

We were able to acquire shares of Amazon (AMZN) just before the stock split. We aimed to maintain portfolio diversification, and this company presented an excellent opportunity to invest in a proven blue-chip stock at a discounted price. Take a look at what Amazon has in store; we believe you'll be impressed by what you find. This company isn't going anywhere for a long time.


*We are not financial advisors. The information provided here is for informational purposes only and should not be considered financial advice. Investing involves risks, and past performance doesn't guarantee future results. Always do your own research and consult with a qualified professional before making any investment decisions. We are not responsible for any financial actions you take based on the information provided.

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