How Amazon became the most backed company by top money managers
From a small online bookstore to e-commerce giant Amazon shows impressive growth in both retail and cloud computing Its smart cash-flow management and AI investments make it popular with top investors
The Telegraphʼs stock-picking column Questor turns 60 on Dec 7th sharing its birth-year with Jeff Bezos - the mind behind todays tech giant
The e-commerce leader (which started as a simple book-shop) now controls about 40% of North-Americas online retail market. Its smart cash-flow system lets them get paid by customers way before paying suppliers: in 2023 the gap was 29 days which helps fuel the companys non-stop growth
- Fresh food delivery
- Electronics marketplace
- Third-party seller platform
- Advertising services
- Premium subscriptions
The companys revenue jumped from $2‚8bn in year 2000 to expected $638bn by end of 2024 - thats a mind-blowing increase. The retail part brings low profits but its cloud division AWS (launched back in 06) shows really good numbers with 27‚1% operating margins
Amazonʼs latest moves in AI are super-interesting: theyʼve got their own AI chips design team and just put $4bn more into Anthropic company (a strong player in AI field). The cloud business – AWS keeps growing fast and cant even keep up with all the demand
Looking at numbers its shares trade at 34 times next years earnings which might seem high but with all the growth potential and rising profits its actually at decade-low levels. No wonder why 20 of worlds best fund managers (top 3% by Citywire ratings) keep big positions in Amazon stock
