Amazon Stock Surges as Cloud Computing Division Shows No Signs of Slowing Down
Amazon's stock price surged 15% after the company released its second quarter earnings report. The Motley Fool believes this increase is just the beginning, as Amazon continues to invest heavily in its infrastructure and cloud computing division.
AWS, or Amazon Web Services, contributed 60% of Amazon's profit despite making up only 21% of total sales. Its growth rate is impressive, with sales rising 37% year over year and operating income increasing 64% year over year.
Amazon's investment in its data centers has been significant, with $220 billion allocated for this year alone. This will enable the company to meet the growing demand for cloud computing resources from AI companies. Andy Jassy, Amazon's CEO, is bullish on AWS and believes it could generate $1 trillion in revenue someday.
If AWS reaches its projected revenue goal, it would result in a huge division by itself, producing $391 billion in operating profit. This would be more than double the operating income of Apple and Nvidia, two of the world's largest companies. Amazon's stock price is expected to continue rising as the company's growth rate holds up or accelerates.