Amazon (NASDAQ:AMZN) stock is now worth , but companies worth buying into never rest on their laurels. Once a milestone is reached, the great ones seek a new one.
While Amazon was struggling toward its latest milestone, remember, Nvidia (NASDAQ:NVDA) blew past it. It’s now just the fourth most-valuable company in the market.
It’s also getting cheaper. Shares now trade at 3.3 times sales and 53 times earnings. When it passed $1 trillion, , it was more expensive by these measures.
But is almost impossible. There are too many moving pieces. You must look at each one individually.
AWS and AMZN Stock
Amazon Web Services, the Amazon Cloud, is its Atlanta. . AWS is now a $100 billion business, but it’s being pressed hard by Microsoft (NASDAQ:MSFT).
That’s why was replaced as AWS President last month with . Garman immediately showed off aimed at improving customer relations, and for startups to build AI on AWS.
Going forward, it’s all about operations. How AWS will deal with of Nvidia chips is important. But so is , which can take some of the load off those chips and keep costs low.
Software is also key. is the new service that will be streaming Generative AI applications. Amazon put , to use its large language models. The latest model is .
Then there’s Alexa. Chatbots are suddenly sexy, with Apple (NASDAQ:AAPL) moving to make Siri the glue holding its own AI play together. Despite selling Alexa devices, the service is now a laggard.
Changing that may mean , as much as $10 per month. Making the expense is vital, but Alexa has gotten too big to kill.
Health and The Store
Amazon still gets the bulk of its operating cash flow from its store, a virtual Walmart (NYSE:WMT) with
Amazon is now preparing for its July 16 event, a summer sale that in previous years was
All is not well on the merchandising side. are pressing it in fast fashion as hard as Microsoft is in cloud services. The response is to ship Chinese-made fashion goods more directly, the normal warehouse distribution system.
While Amazon is on defense when it comes to clothes, it’s on offense when it comes to health. The collapse of Walgreens (NYSE:WBA) represents an opportunity, as do growing “health deserts.”
The answer is to rebrand the Amazon Clinic online service as , offering $49 per visit telehealth appointments or a subscription plan at $199/year, half that for Prime members.
Amazon bought One Medical last year for and brought in from Legacy Health, a hospital system in the Pacific Northwest,
All this is on top of , now pitched as a portal for managing chronic conditions that take up 75% of Americans’ health bills.
The Bottom Line
Analysts who do SWOT analyses see Amazon earning Amazon next reports July 24 and makes a habit out of beating estimates. The latest one-year price target from Wells Fargo (NYSE:WFC) is , a 20% gain.
AMZN stock bulls must remember that value is vulnerable. In tech’s last bear market, just two years ago, . But it has since gained all that back, and more.
Amazon is a stock you own, not one you trade.
As of this writing, Dana Blankenhorn had a LONG position in MSFT, AMZN, NVDA and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
