Amazon (NASDAQ:AMZN) stock presents a compelling investment thesis in 2024 despite its lofty valuation. Amidst e-commerce and artificial intelligence competition, Amazon’s skyrocketing earnings and long-term growth outlook stand unmatched.

The company’s recent emphasis on cost reduction has propelled remarkable growth in the past year with a promising trajectory for continuation. Analysts foresee an over 30% year-over-year surge in EPS for FY24, while Amazon’s cloud division maintains a leading position in the AI landscape. Whether seeking a retail behemoth or a technological powerhouse, Amazon offers investors a duality that makes it a standout choice in 2024.

Earnings Surge and Financial Health

Amazon’s cost-saving initiatives in 2023 have borne fruit with staggering outcomes. The firm’s earnings and free cash flow have ascended dramatically over the last year. In FY23, AMZN stock recorded a net income of $30.4 billion, or $2.90 per share, marking a notable improvement from the net loss of $2.7 billion, or $-0.27 per share, in FY 2022.

Moreover, Amazon witnessed a record free cash flow of $36.8 billion, with the cost-saving measures and investments in generative AI acting as primary growth drivers. This financial robustness and turnaround are instrumental for the company to build on momentum in the 2024 fiscal year.

Glancing at Amazon’s most recent quarterly financial results, analysts underscore a substantial uptick in earnings per share (EPS). Current estimates signal a more than 30% climb in EPS in the 2024 fiscal year, a pivotal growth catalyst as Amazon continues to enjoy diversified expansion across all business verticals.

AWS Empowered by Artificial Intelligence

Amazon Web Services (AWS), the company’s primary cloud computing arm, will persist as a key growth driver. Dominating the cloud infrastructure market, AWS leads the artificial intelligence revolution. Developing AI models mandates substantial computational prowess, an aspect where AWS infrastructure shines. Their generative AI platform, Amazon Bedrock, stands out as a comprehensive platform for efficient and cost-effective scaling of generative AI models.

Amazon’s heavy CAPEX investments cater to the evolving market demands. Custom-designed chips like Tranium and Inferentia are tailored for AI workloads’ specific needs. The forthcoming EC2 deep learning chip with over 100 billion parameters is poised to significantly reduce costs, signifying a transformative breakthrough. Emphasizing AI underscores the significance of Amazon’s strategic positioning, given the anticipated rapid growth of the AI enterprise software market.

AMZN Stock: Sustained E-Commerce Dominance and Beyond

Despite heightened competition, Amazon retains its unchallenged supremacy in e-commerce. In the 2023 fiscal year, the company accomplished record fast deliveries, dispatching over 7 billion units for same-day or next-day delivery. Amazon’s perpetual innovation and expansion via Amazon Prime further augment its offerings.

Furthermore, Amazon transcends cloud computing, e-commerce, and AI pursuits. Successfully branching into healthcare and advertising, the company’s advertising revenue surged 27% year over year to $14.65 billion in Q4 2023, portraying its ad services segment as a formidable rival to Meta and Google. These strategic forays, coupled with AI leadership, firmly establish Amazon as a premier global technology powerhouse.

On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.