Here’s the math on Amazon CEO’s claim to be on path to two trillion-dollar revenue businesses
Amazon chief executive Andy Jassy set a bold target on the conference call announcing third-quarter earnings.
Amazon CEO Andy Jassy's assertion that the company is on track to have not one, but two trillion-dollar revenue businesses, is a statement that warrants scrutiny. To put this into perspective, Amazon's total revenue for 2020 was $386 billion. Currently, only a handful of companies worldwide have achieved the trillion-dollar revenue milestone, with tech giants like Apple, Microsoft, and Alphabet being among them.
The prospect of Amazon having two separate business units with trillion-dollar revenue potential is certainly ambitious. One possible candidate for such growth is Amazon Web Services (AWS), which has already demonstrated remarkable success, generating $73.9 billion in revenue over the past 12 months. The e-commerce giant's cloud infrastructure and services segment has been a major growth driver, and its scalability and profitability make it a prime candidate to reach the trillion-dollar mark. The question remains whether Amazon's other businesses, such as its e-commerce platform or advertising segment, can achieve similar success.
For fund managers and investors, the key takeaway is to monitor Amazon's progress in achieving this ambitious goal. They should keep a close eye on the company's quarterly earnings reports and assess the performance of its various business segments. Additionally, investors may want to watch for signs of growth in emerging areas, such as artificial intelligence, digital payments, and online advertising, which could contribute to Amazon's revenue growth and help it reach Jassy's stated target. As always, a critical evaluation of the company's financials, competitive landscape, and market trends will be essential in making informed investment decisions.
Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.