Seattle, WA – After a strong finish to 2023, Amazon is poised for continued success in 2024. The company’s financial performance and strategic developments signal positive momentum, which could lead to further growth in share price. Key factors such as the reacceleration of AWS (Amazon Web Services) and the North America segment catching up to AWS in operating income have contributed to this optimistic outlook.
In terms of AWS, the reacceleration of the company’s cloud business has been a significant development in recent months. AWS revenue growth has shown signs of improvement, with revenues in the segment growing 13% year-over-year to $24.2 billion. The reacceleration narrative is further supported by forecasts for worldwide public cloud end-user spending, which is expected to reach $679 billion in 2024. These positive indicators point to a potential upturn in AWS’s topline growth.
Additionally, Amazon’s North America segment is poised to increase its operating income, potentially surpassing that of AWS. The introduction of ads on Amazon Prime Video in the U.S., UK, and Germany, along with other advertising features, could significantly contribute to the segment’s operating income in 2024. The potential for billions in additional revenues from advertising, combined with cost efficiencies in the retail business, indicate a positive trajectory for the North America segment.
While these developments paint a promising picture for Amazon’s future, there are important risk factors to consider, such as the potential impact of a recession on the company’s retail and advertising business. Despite the risks, Amazon’s overall transformation and ongoing developments in AI monetization and advertising utilization position the company for continued success in 2024.
Overall, Amazon’s strong finish in 2023 and the positive developments in key segments suggest a promising outlook for the company in 2024. As the company continues to transform its business and capitalize on new opportunities, investors can look forward to potential share price gains in the coming year.