Amazon's AI Bet: Why Dividends Are a Distant Memory
Amazon's impressive performance over the past decade has left many investors wondering why it doesn't pay dividends. However, its focus on aggressively investing in growth initiatives has driven significant revenue and profit growth for shareholders.
The company's huge investment in artificial intelligence (AI) and cloud computing, through Amazon Web Services (AWS), has yielded a 39% operating margin last quarter. This is a testament to the success of its strategy to prioritize long-term growth over short-term earnings.
Amazon's CEO Andy Jassy is optimistic about the AI revolution, and it seems likely that excess cash will continue to flow into infrastructure build-out. The company's backlog now sits at $496 billion, with demand for AI tools off the charts.