Buy Amazon Stock, But Not Because of E-Commerce
One of the more notable transformation stories in tech recently is Amazon (NASDAQ: AMZN). The online seller pioneered e-commerce in North America and many parts of the world. And with its role in creating the cloud, it later evolved into a conglomerate.
However, mounting e-commerce losses mean that the cloud segment, Amazon Web Services (AWS), drives most (or sometimes all) of the company's profits. This does not negate the investment case for Amazon, but profiting from Amazon will require investors to look at the internet and direct marketing retail stock in a different light.
After years of profits, Amazon's e-commerce operations now lose money. But despite the losses from online retail, its reputation serves as a platform for its actual growth drivers. Indirectly, its web presence acts as an undeclared Amazon advertising campaign, keeping its name in the minds of the public. It also drives considerable market power, allowing it to compete aggressively against top retailers such as Walmart and Costco.
Source Fool.com
