Amazon's Decade-Long Dividend Silence: A Key Driver of Long-Term Growth

Amazon's stock has skyrocketed 66,570% over the past 25 years, making it one of the top performers for investors this century. Despite not paying a dividend in its entire operating history, long-term investors should own shares because the company prioritizes growth opportunities.

The leadership team, including founder Jeff Bezos and current CEO Andy Jassy, has allocated capital to increase revenue and profit far into the future. This approach has clearly worked, as Amazon's ability to invest aggressively in promising opportunities supports ongoing revenue and profit growth, benefiting shareholders.

One of the key reasons Amazon doesn't pay dividends is its focus on AI and cloud infrastructure build-out. The company projects capital expenditures of $220 billion this year, 67% higher than last year, to expand compute capacity to meet strong demand from AWS customers.

AWS posted 37% year-over-year revenue growth in Q2, the fastest pace in 18 quarters, driven by high demand for AI tools. The segment's backlog now sits at $496 billion, a testament to Amazon's leadership in cloud computing.