Amazon Stock at Record Highs: Analysts See Room for Further Growth
Amazon's stock has been steadily rising in value and is now near record highs. Despite its current high valuation, analysts believe that Amazon still has room for growth.
The company's major business segments are showing solid pace growth. Its cloud segment, Amazon Web Services (AWS), is accelerating with revenue reaching $42.2 billion in Q2, a 36.7% year-over-year increase. This marks the fifth consecutive quarter of accelerated growth, with AWS adding over $4.6 billion in revenue compared to the previous quarter.
AWS has reached an annualized revenue run rate of approximately $169 billion and its backlog has expanded significantly to $496 billion, growing at a triple-digit rate year-over-year. The segment's rapid expansion is driven by customer migration to the cloud and increased reliance on AWS' core services.
Amazon's custom chip business also contributed significantly to its financials, with an annualized revenue run rate exceeding $25 billion and expanding at triple-digit rates year-over-year. Additionally, the company's AI-related revenue run rate has risen substantially from the previous quarter and surpassed $25 billion, also growing at a triple-digit rate.
Amazon's advertising business is another important source of growth, with revenue reaching $19.8 billion in Q2, representing a 26% year-over-year increase. The company is optimizing its fulfillment operations to improve efficiency, with initiatives such as inventory optimization and robotics and automation.