$Amazon.com(AMZN)$ Never in the history of Amazon has the CEO focused on cost. It has always been growth. Amazon has two key drivers which should impact operating margins in a big way over 2024 and beyond:
1. Build out of advertising- they just launched streaming ads on prime and are ramping up the business. This will do two things 1) Grow advertising revenue by double digits likely 30-40% YoY in 2024. 2) Improve NA margins as advertising has a much lower cost to serve than eCom.
2. Lower cost to serve for eCom. In the annual letter a lot of the eCom focus was on lowering delivery times. This will also lower cost to serve. I suspect both faster delivery time and improvement to cost to serve. They will further scale this against international which should be able to contribute to positive NI by end of 2024 or early 2025. Amazon delayed launching new market just for this reason.
Amazon new push is profitability and they will see double digit income grow for at least the next few years.
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