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At the beginning of 2023, I made three predictions: Amazon (AMZN 1.20%) Stock investor. Let’s see how I did it:
- I predicted that Amazon’s e-commerce sales would recover. In his three quarters reported so far in 2023, online sales growth has accelerated compared to the same period last year, so we’ll put that in the “win” column.
- My call for Amazon to move further into the healthcare space has come true as well. Amazon has completed its $3.9 billion acquisition of One Medical. He rolled out his RxPass, a monthly prescription service. We also launched Amazon One Medical for Prime, giving Prime subscribers access to certain healthcare services for $9 per month.
- We also correctly said that Amazon will maintain its lead in cloud computing. Through the first three quarters of 2023, Amazon controlled about 30% of the market on average. microsoft Coming in at 25%, alphabetGoogle Cloud maintains 9%.
- As a bonus prediction, I hypothesized that Amazon stock would recover from its historic lows. And hello, I was right. Amazon stock lost half its value in 2022, but soared 81% in 2023, making it one of the top performers among big tech companies.
I got all three predictions right and even scored in the bonus round, but in hindsight each seems like a big hit. Let’s see if we can keep this record alive with three predictions for 2024.
Image source: Getty Images.
1. Amazon’s cloud growth accelerates again
Amazon maintained its position at the top of the cloud heap, but its growth struggled. Since peaking in the fourth quarter of 2021, year-over-year growth has slowed every quarter. This is not surprising. This was at the beginning of the recession, and the economy had only recently regained its footing.
In Q3, Amazon Web Services (AWS) finally stabilized, matching Q2’s 12% growth. I expect growth to remain stable and reaccelerate to rise in 2024, driven by an improving economy.
2. Amazon’s artificial intelligence is a sleeping giant
This prediction is inexorably tied to the first. Despite improved macroeconomic conditions, the stock market recovery last year was largely uneven. The biggest winners were those that were best positioned to take advantage of the opportunities represented by advances in generative AI.
While Microsoft and Alphabet made headlines early last year by releasing generative AI tools on their respective platforms, Amazon was largely absent from the conversation. This has led some to conclude that Amazon is “late” in the AI race, and that perception persists.
Amazon is working to change that. Late last year, the company released Amazon Q, a unique generative AI-powered digital assistant designed to help AWS cloud users be more productive. Q leverages company-specific sources to answer questions, generate content, and streamline various tasks. AWS also offers a rich set of generative AI models via Amazon Bedrock, as well as Nvidia‘s latest AI chip, the H200 Tensor Core graphics processing unit.
It’s important to remember that generative AI is still in its infancy, as the current version of this technology has only been available for about 14 months. There’s still plenty of time for Amazon to stake its claim, and as the world’s largest cloud provider, it’s well positioned to do so.
Not only will Amazon’s cloud growth accelerate again, but the company will become a force to be reckoned with in the generative AI space, powered by AWS.
3. Amazon plans to join Microsoft and Apple in the $2 trillion club in 2024
Although rising to 81% in 2023, the aforementioned drivers suggest there is still more growth ahead for Amazon. The company also has an industry-leading e-commerce platform, but it has struggled in the face of high inflation. Additionally, Amazon is experiencing growth in the digital advertising space, with ad sales increasing by 23% to $32.2 billion in the first nine months of 2023, and arch rival Alphabet and its growth. exceeds. meta platformgrew by 4% and 13%, respectively.
Amazon maintains its dominance in e-commerce and cloud computing, coupled with its growing importance in digital advertising and generative AI, driving strong financial results, driving further share price gains in 2024 and increasing market capitalization. will exceed $2 trillion.
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Danny Vena has held positions at Alphabet, Amazon, Meta Platforms, Microsoft, and he has Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
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