Clouds Gather for Amazon and Microsoft
The tech sector has outperformed all others in the past decade, rising by 771% as of August 21. Amazon and Microsoft are two individual tech stocks that investors may want to consider adding to their portfolio due to their diversified businesses.
Amazon's core business is e-commerce, but it also has a thriving cloud services division, Amazon Web Services (AWS), which accounted for 61% of the company's operating income in the second quarter despite only generating 21% of its revenue. Similarly, Microsoft's cloud platform, Azure, brought in $39.3 billion in revenue and is considered the main growth driver for the company.
In contrast, Tesla's valuation is difficult to justify given the state of its core business and uncertain timelines for other projects. The company is trading at over 205 times its projected earnings for the next 12 months and has been burning through cash while its vehicle sales stagnate.