Amazon’s cloud computing segment, Amazon Web Services (AWS), has become a significant profit driver, generating 50% of the company’s operating profits in Q4 2022 despite accounting for only 17% of total sales. AWS experienced 24% revenue growth during this quarter—the highest in over three years—prompting Amazon to commit $200 billion in capital expenditures to expand its infrastructure. This investment supports long-term growth projections for AWS.
As of now, Amazon’s stock is trading at 19 times its operating cash flow, which is comparatively lower than peers such as Apple and Alphabet. This valuation presents an attractive opportunity for investors, who are still entering the stock at favorable levels despite a recent 20% rise in its price.
