I finally got my MacBook back, more articles coming now. So I know what I want to write about for the next twenty something days, but I just can’t find the time to do it, so here’s another late night article.
Let’s talk about the one investment you could make to take you into retirement. I think, wait scratch that, I KNOW, that it’s Amazon.
Wait, Amazon? They run razor thin margins, you don’t know what you’re talking about. They have competition everywhere, and once again, they barely make a profit.
The numbers you’ve heard about Amazon for years now only encompasses less than one half of their business. The other half of Amazon (and one of the MOST PROFITABLE products in the world used by just about everything on the internet) is called Amazon Web Services or A.W.S.
A.W.S. single handedly makes Amazon one of the best stocks to buy this decade. And then you find out that Amazon has spent over $7 billion in buying out their competitors for A.W.S. and you start seeing Jeff Bezos’ (the GENIUS CEO of Amazon) end game.
Bezos has spent billions of dollars (Amazon’s as well as his own) on R&D of everything from the utilization of drones to deliver packages to self driving cars and self landing rockets. He is truly an Elon Musk type CEO and knows exactly what to do to get the new “must have” before everyone else.
So when Amazon expanded into brand new fields, it was clear that they were expanding their target audience from just people looking to shop on their site to everyone possible. They offer a MUCH CHEAPER Netflix video streaming program, which is paired with free 2 Day Express shipping on any of the items bought from Amazon for $99/year, have expanded into Virtual Reality, sports, online gaming, drones, robotics, self driving cars, everything in between, and now finally, the internet itself.
A.W.S. is revolutionary because Amazon offers a host of programs and amenities that most other cloud based and website hosting companies do not. It’s so good and such a genius idea, and Bezos and his team at Amazon has capitalized on it. If they spun off A.W.S. into its own company, it would easily have a market cap of $150 billion (half of Amazon’s $300 billion market cap), and would only grow because it wouldn’t be bogged down by the retail side of Amazon.
I’m clearly not doing it justice by not explaining its game changing capabilities and how it is revolutionizing the internet, but just leave with this, Amazon will be that one stock five years from now that you wish you’d bought even at this high price.
Amazon is at $620 right now. Over the last 5 years the stock had increased about $80 y/y, but last year it broke out to close to $300 in profits, and you can only expect it to go up, or at least maintain the same level of performance, because most of the growth was generated by A.W.S.