Why Amazon Stock is a Solid Investment Choice Right Now

Reasons to Buy Amazon Stock Now

Digging deeper into the e-commerce giant's results paints an even more bullish picture. As far as quarterly results go, Amazon (NASDAQ: AMZN) shareholders have nothing to complain about right now. The e-commerce giant's first-quarter revenue of $143.3 billion and per-share earnings of $0.98 both topped estimates and were well up from year-ago levels. Amazon stock edged higher following Tuesday evening's release of the company's first-quarter report. Chalk up another win for all the obvious reasons.

1. Amazon Web Services is becoming much more cost-efficient

Perhaps one of Amazon's most exciting growth engines at this time is its cloud computing arm. Indeed, Amazon Web Services (or AWS) has grown at a double-digit pace for several years now. This business ran into an alarming wall beginning in mid-2022, though, thanks to the steep costs of operating a cloud computing arm in an environment rife with inflation. AWS's operating income and operating margin rates have been weak since 2022, even though its cloud revenue has continued to grow.

2. E-commerce is (finally) a business well worth running

It's curious. In Amazon's infancy, it was far more concerned with expanding its reach than turning a profit. And investors were OK with the idea. The company never seemed interested in turning up the heat on its bottom-line growth, though -- not even when it arguably could have. Shareholders became so accustomed to its thin profit margins that they never really pressed the issue either.

3. Advertising and subscription revenue is soaring

But why is Amazon's e-commerce business suddenly so profitable? Greater scale and improved efficiency are certainly factors. However, the business is also evolving. Amazon.com is becoming less of a mere online mall and more of an advertising platform.

All of it makes Amazon stock an even better buy.