Shopify (NYSE: SHOP) and Amazon share many traits. Both are industry leaders in their respective e-commerce fields. They've made numerous billionaires and are popular with investors. Shopify is the fresher, shiner stock, up roughly 3,000% since its IPO. Amazon has expanded by 730%, but after being public, it has grown by 184,000%, an incredible statistic.
Newer isn't always better. Amazon stock has risen 19% in 2024, while Shopify stock has remained unchanged. Amazon wins consistently and has plenty of opportunity, but Shopify has potential.
World is Amazon's oyster Amazon leads e-commerce and cloud computing, two of the world's fastest-growing businesses. Amazon benefits the most from the growth of e-commerce as a percentage of retail sales because it accounts for approximately 40% of U.S. e-commerce sales. It's making it the premier retailer for its hundreds of millions of Prime subscribers by speeding up deliveries and selling more products than anybody else.
E-commerce is its staple and generates the most revenue. But Amazon Web Services (AWS) matters too for two reasons: Despite accounting for only 14% of revenue in the fourth quarter, it generates more than half of operating profitability and has a huge market opportunity. After rising faster than the firm, sales growth has slowed as clients cut spending due to inflation. Management sees this changing and is making new arrangements with Merck and Hyundai.
Amazon uses AI in all its businesses, but AWS has huge potential for generative AI. Amazon is an industry leader and offers a growing and competitive range of solutions that potentially improve clients' lives. Using Amazon Bedrock and Amazon SageMaker, hospitality operator Accor S.A. designed a generative AI travel assistant to increase reservations and reduce call traffic.
Predict the unexpected Amazon appears in unexpected places. Amazon is using drones to deliver more packages and offering Buy With Prime to third parties that can use Amazon's payment and logistics networks through their websites.
Amazon expanded its streaming services and released full-length films in theaters after acquiring MGM Studios. That joined the other big premium streaming networks in ad-free and ad-supported streaming and added thousands of movies to its collection.
After acquiring One Medical last year, Amazon is doubling down on healthcare. Prime members can add One Medical for $9 per month or $99 annually, plus $6 per month for each family member. CEO Andy Jassy said "it's still early days," but he sees wellness and diet as opportunities to revolutionize healthcare.
Advertising is Amazon's fastest-growing industry and has huge potential. Amazon offers generative AI tools for advertisers to produce lifestyle imagery to enhance engagement and conversions, and unlike its competitors, it offers a wide range of advertising mediums, including its unparalleled shopping site and ad-supported streaming tier.
What will Amazon do next? Opportunities seem practically unlimited right now. Amazon will likely continue. Amazon stock is up 77% in a year, and it could create more millionaires as it dominates its industries.
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