Key Points
Amazon (NASDAQ: AMZN) reported significant growth in its AWS segment, with a revenue increase of 24% in Q4, marking its best quarter in over three years. AWS accounted for only 17% of Amazon’s total sales but generated 50% of its operating profits during the same period.
The success of AWS is attributed to Amazon’s development of custom AI chips, Trainium and Graviton, which have seen triple-digit growth recently. These chips present a cost-effective alternative for running AI models compared to traditional GPUs, positioning AWS for continued strong growth in the coming years.
Despite a historical average growth rate of approximately 10% for Amazon’s online stores, AWS’s accelerating revenue growth offers a compelling reason for investors to consider Amazon as a strong buy.
