g//@daz88888888:$Amazon.com(AMZN)$
While every analyst with an Excel spreadsheet was demanding that they pay dividends, cloud czars Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) held firm.
It’s a tech tradition like no other. Tech companies husband cash when times are good so they can keep growing when times are tough. The joke is, “Dividends mean we don’t have anything better to do with the shareholders’ money.”
You can see it in Amazon’s first quarter report. Free cash flow was negative $18.1 billion for the 12 months ending in March. Yet Amazon had $15 billion in capital spending during the quarter. This was possible because it had over $66 billion in cash and marketable securities on its books at the end of the period.
Thoughts on Amazon ?
@daz888888888：$Amazon.com(AMZN)$ Yahoo Finance Live anchors break down Amazon’s 2% investment in Grubhub. Main Amazon Updates Amazon (NASDAQ: AMZN has gone through a volatile stretch over the last few years. The surge in customers and sales at the pandemic's onset has been followed by decelerating growth and rising costs. Amid all of that was a change in CEOs and a stock split. But none of the above are reasons to buy. Instead, the green flag I will discuss is the massive customer commitments it has for its lucrative Amazon Web Services (AWS) segment, the primary driver of Amazon's profitability these days. $89 billion worth of signed contracts As of March 31, Amazon's web services segment has contracts with customers for a total value of $88.9 billion. In other words, customers are committed to spending $89 billion on Amazon Web Services over the next few years. To put that figure into context, in its most recent quarter (ended on March 31), AWS generated revenue of $18.4 billion. That was a 37% increase from the same quarter in the prior year. What's more, it was an acceleration of the 32% growth it achieved in the same quarter of last year. Note that contractual obligations turn into revenue as customers use the service they agreed to buy. Significantly, on that $18.4 billion in AWS revenue, Amazon earned an operating income of $6.5 billion. Amazon's other two segments, North America and international, generated an operating loss of $1.6 billion and $1.3 billion, respectively, in the quarter ended in March. These two segments are suffering the effects of economic reopening as consumers spend more of their money at brick-and-mortar retailers. Besides the losses in this most recent quarter, the two segments are notoriously lower-profit-margin businesses. It's great news for Amazon that its more profitable segment is accelerating revenue growth and has a massive backlog of customer demand to fulfill. While its other segments may continue facing headwinds from the economic reopening, AWS continues to thrive. Indeed, the growth of AWS to a more considerable portion of Amazon's overall business has boosted its operating profit margin over the last decade. A great time to buy Amazon's stock That's creating an opportunity for long-term investors. The market has punished Amazon's stock, which is down 41% off its highs in 2021. Investors are concerned about decelerating growth of retail sales domestically and internationally. However, that might arguably be overlooking where the value comes from in Amazon's stock. AWS is where the bulk of profits will come from, and that segment is accelerating. Amazon is trading at a price-to-earnings ratio of 53, near the lowest that investors have been able to buy Amazon stock in the last five years. The worries over its online sales deceleration have created an excellent opportunity for long-term investors to buy Amazon stock -- a green flag, to be sure.
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