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Amazon is emerging as a potential contender to become the largest company in the world by market cap by 2030, as it grows its advertising and cloud computing segments. In the first quarter, Amazon’s advertising revenue rose by 18%, making it the fastest-growing segment. Meanwhile, Amazon Web Services (AWS) experienced a solid 17% growth with an impressive operating margin of 39%.
Despite the growth, analysts project that Amazon may struggle to surpass Nvidia, which is rapidly growing, likely affecting its stock’s competitive edge against Microsoft. Amazon’s expected growth rate over the next five years is around high-single-digit revenue growth and 20% in operating profit.
In the first quarter, AWS accounted for 19% of Amazon’s overall revenue but contributed 63% of the company’s total operating profits. As these high-margin segments continue to drive performance, Amazon is expected to deliver strong returns to investors over the coming years.
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