If there’s one thing Amazon knows how to do, its increase profitability. And despite the economic volatility this year…
The company was able to hit new profit records while still investing in new technology to expand the business.
Here’s how the company was able to avoid losing its gains…
Breaking Down Amazon’s Profitability
When Amazon reported record profitability in its latest earning’s call, analyst expectations were blown out of the water. Once the news broke, the company’s stock jumped 5%…
BETWEEN JULY AND SEPTEMBER, AMAZON MADE $158.9 BILLION.
That’s up from 11% a year earlier. Not to mention, Amazon’s profitability went up a whopping 55%, to $15.3 billion.
Despite difficulty in predicting consumer habits thanks to economic and political uncertainty, sales in North America grew 9%...
Most Amazon users utilize the website as an online convenience store, with two thirds of them buying only an item or two at a time. These items are usually everyday consumables like soap and laundry detergent…
Which doesn’t help Amazon’s profitability that much…
However more and more consumers are starting to treat themselves to small “luxury” purchases…
Signaling a growing economy.
Towards the end of the year, Amazon, and other businesses like Walmart, anticipates a highly successful holiday season.
IF ALL GOES ACCORDING TO PLAN, HOLIDAY SHOPPING COULD SIGNIFICANTLY BOOST AMAZON’S PROFITABILITY.
Other aspects of Amazon’s business have also been increasingly valuable. Amazon Prime also reached new levels of profitability thanks to it’s advertising…
And it’s cloud computing businesses is similarly starting to pick up, accounting for 60% of company’s operating profit.
But the question remains…
What will the company do with its new levels of cashflow.
Amazon’s Future Strategy
While Amazon’s profitability had skyrocketed the past few months…
THE COMPANY’S SPENDING HAS TOO.
In fact, the company said that they would be hitting $75 billion in capital expenditures this year and even more next year…
At the moment, Amazon is investing billions of dollars building data canters to power AI.
Beyond the data centers…
Amazon is incorporating more robotics to its operations to cute costs and pass those savings onto customers.
While Amazon may have hit record profitability…
They are still focused on their mission of giving customers the best deals they can…
Be Great,
GCTV Staff
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