Amazon: A Huge Digital Ecosystem
Amazon.com is the largest marketplace in the world. The company also provides cloud services, artificial intelligence development, streaming services, media content creation, electronic device production, and more. All of these diverse businesses boost Amazon’s revenue stream, making it one of the largest companies in the world.
Amazon Share Price Chart — About The Company
The company was founded in 1994 and began as an online bookstore when less than 0.5 percent of the world’s population had access to the Internet. Today the company has grown to become the world’s largest marketplace, dubbed “the store of all things.
The Amazon Marketplace is a two-way online e-commerce platform where third-party sellers and Amazon directly sell items from various categories. It includes electronics, clothing, home decor, business, garden, kids, and so on — more than 12 million items in just about every category. Amazon live stock price has a positive growth trend, more pronounced than MSFT price after hours.
Also, Amazon owns many subsidiaries in certain segments. These include Audible, the world’s largest audiobook retailer; Whole Foods, the supermarket chain; Souq, a leading e-commerce company in the Middle East; Twitch, a streaming platform; IMDb, a web service; and so on.
The key shareholders of the company are its founder Jeff Bezos, as well as large institutional investors — investment and pension funds, banks, family trusts, and so on. Jeff Bezos led the company from its founding until July 2021, at which point he turned over the management position to Andy Yassi, who had previously led the company’s cloud business, Amazon Web Services. For the latest news about the company, visit letizo.com.
Sources Of Revenue For The Company
Amazon is not only an online marketplace for goods but also a huge ecosystem of various services. Thanks to the entrepreneurial talent of founder Jeff Bezos, Amazon now leads the most trending and fastest-growing industries — e-commerce, cloud services, and online advertising.
E-commerce
In the e-commerce retail market, Amazon is the leader by a wide margin. In particular, the company accounts for about 41% of all online B2C sales in the U.S.; that is, 40 cents of every dollar spent online in the U.S. is spent on Amazon.Walmart and eBay came in second and third with 6.6% and 4.2%, respectively. Also, Amazon is actively increasing its presence in international markets, where sales bring the company about 32% of revenue.
Cloud Services
The company’s cloud infrastructure segment, Amazon Web Services, or AWS, is also an absolute leader in the U.S. and worldwide. According to global analyst firm Canalys, global cloud spending in the first half of 2021 was about $90 billion, with Google Cloud accounting for 7 percent, Microsoft Azure for 19 percent, and AWS for 32 percent.
Digital Advertising
Amazon’s promising business units include advertising, which will grow at a rate roughly commensurate with e-commerce due to synergies across services. Specifically, ResearchAndMarkets expects the global digital advertising market to grow from $374.2 billion in 2020 to $763.6 billion in 2025 at an average annual growth rate of 15.3%, and to reach $1.45 trillion by 2030 at an average annual growth rate of 13.7%.
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Financial Results And Balance Sheet
Amazon’s average revenue growth rate over the past few years has been at 30% y/y. The most profitable segment, AWS, is growing the fastest, which has a positive impact on the company’s overall profitability.
The company has a very strong financial position due to its market dominance, technology availability, and low debt load. The main sources of liquidity are cash flows from operations.
Financial Outlook
Given the company’s leading position in almost all of its sectors of activity, we can expect significant growth in financial performance by 2025 with a moderate increase in market share in all segments. By 2025, the company’s revenues in North America could increase to $680-825 billion, and in the international segment to $260-350 billion. Amazon Web Services could bring the company up to $165 billion.
Amazon Share Price Chart 5 Years — Company Forecast
Amazon leads the fastest-growing industries and has a lot of undeniable competitive advantages. That’s why the 5-year Amazon share price chart has a positive outlook.
These include the availability of enough liquidity, in-house logistics, technological innovations, dominant market position, etc. The company actively develops and enters new markets and business segments through organic growth as well as through M&A transactions. As a leader in online commerce, Amazon is shifting its development focus towards high-margin digital services and services, which leads to an overall increase in profitability.
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