Amazon (NASDAQ:AMZN) Thanks to its dominance in the high-growth areas of e-commerce and cloud computing, the company has generated billions of dollars in revenue over time. The e-commerce company sells everything from groceries and other essential goods to bulk goods, fulfilling almost every shopping need. And Amazon Web Services (AWS) has long been the world’s largest cloud services provider, offering companies a wide range of services from analytics and data storage to artificial intelligence (AI).

In the most recent quarter, these deals helped Amazon generate more than $158 billion in revenue and $15 billion in net income. Additionally, free cash flow and return on invested capital (ROIC) are rising again after declining a few years ago. The increase in free cash flow shows that Amazon has the resources to support future growth, and increases in ROIC signal that the company has made smart investment decisions. Stock performance reflects this momentum, and the stock is headed for a 50% gain this year.

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All of this makes Amazon a great stock – now let’s look at two reasons why: at the momentYou should buy this market giant like there is no tomorrow. Both points, one related to e-commerce and the other offering a significant boost to AWS, make Amazon a winning choice as they are expected to lead to a new wave of growth in the coming quarters and in the long term.

Amazon stumbled in 2022 as runaway inflation drove up costs and supply chain problems also hit profits. For the first time in almost a decade, the company even posted an annual loss. But the problems didn’t last long. Amazon used this as an opportunity to overhaul its cost structure – cutting jobs, increasing efficiency in its fulfillment centers and focusing on delivering packages to customers faster and more cost-effectively.

A key change was the shift in the U.S. fulfillment model from a national to a regional one. This brings the items closer to the buyer, making delivery much more efficient – ​​and saving Amazon on delivery costs. Last quarter, Amazon said it improved its ability to distribute inventory across fulfillment centers by 25% compared to the same period last year. And Amazon says it’s still early in the process of reorganizing its inventory, so greater efficiencies and savings should be on the way.

But the plan has already delivered impressive results. It helped Amazon return to profitability a year after posting an annual loss and has helped boost sales since then. So this better cost structure helped Amazon recover quickly after a difficult period, and now we can count on it to drive growth in better times.

The story continues