Amazon Set to Ascend to Next Decade of Growth
E-commerce and cloud giant Amazon looks set to ascend to the next decade of growth. The major focus of the Q4 results was AWS (Amazon Web Services), which witnessed a reasonable rebound. At present, Amazon stock is trading at around 13.7x EV/EBITDA (on a forward basis) compared to its own five-year historical average of 21x. The Wall Street community is clearly optimistic about Amazon stock, with a majority having raised their price targets on the stock post-earnings. Additionally, there are other areas of profitable growth, including e-commerce, Amazon Prime memberships, as well as a strong advertising business. When I gave Amazon a Buy rating last year, the AWS segment was facing macro headwinds. I was optimistic that they were only temporary and that AWS would rebound. The recent Q4 results proved just that. The stock has since gained 70%+, but I continue to be bullish on AMZN based on reaccelerated growth across AWS (fueled by AI), e-commerce, and its advertising business, as well as margin and cash-flow expansion.
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