Dividend Downfalls: Amazon
Amazon stocks have surged by 170% over the last five years. In the beginning, Amazon was just a marketplace, but now it has a very diverse business ranging from a streaming service, Amazon Prime Video, to Cloud Amazon Web Services (AWS). Moreover, it would be absolutely wrong to only consider Amazon as a marketplace. The AWS segment of the company alone may count for over $1.4 trillion, which is currently the overall Amazon market cap.
AMZN stocks have lost 25% since the beginning of 2022 due to the disruption of supply chains and a very strong U.S. Dollar. Q2 2022 revenues of Amazon only rose by 7% year-on-year to $121.2 billion, while operating income dropped by 57% year-on-year to $3.3 billion. Over the last 12 months the company has increased its capital spending and, therefore, its net cash flow has gone down from $4.2 billion to -$26.1 billion.
AWS net sales jumped by 33% year-on-year to $19.7 billion in the Q2 2022, while sector operational income rose by 36% year-on-year to $5.7 billion. The net margin of Amazon.com is close to 10% amid a widening cooperation with third-party sellers, but the AWS net margin has already jumped to 30% and may grow to 40% soon. Cloud segment revenues not only compensated for the slowdown of retail sales, but allowed for the invest in new segments like Zoox autonomous vehicles.
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