amazon's 2020 earnings should be taken with a grain of salt. in my eyes a lot of their revenue growth came from the lockdown and stimulus. just like covid was a black swan event, 2020 earnings (and 2021 earnings to an extent) were black swan earnings.
The ppe investment is part of jeff bezo’s strategy. He believed in returning value to the customer through investments in the core business (warehouses and fast deliveries) and low profit margins (cheap prices). It keeps other competition down because the margins are so low. Genius in my opinion. If they ever decide to stop spending earnings will explode. Aws is basically carrying the business until it scales to whatever they are shooting for.
Yeah, it’s definitely worked for them so far. However, it’s a risk that they reach a point of earning very low returns on that capital especially once you are investing hundreds of billions of dollars.
amazon's 2020 earnings should be taken with a grain of salt. in my eyes a lot of their revenue growth came from the lockdown and stimulus. just like covid was a black swan event, 2020 earnings (and 2021 earnings to an extent) were black swan earnings.
Yeah, the future results are definitely the ones that matter and it’s tough to asses with the two recent COVID years in the way.
What do you think of MATX? Great analysis
Haven't looked at that one yet.
The ppe investment is part of jeff bezo’s strategy. He believed in returning value to the customer through investments in the core business (warehouses and fast deliveries) and low profit margins (cheap prices). It keeps other competition down because the margins are so low. Genius in my opinion. If they ever decide to stop spending earnings will explode. Aws is basically carrying the business until it scales to whatever they are shooting for.
Yeah, it’s definitely worked for them so far.
However, it’s a risk that they reach a point of earning very low returns on that capital especially once you are investing hundreds of billions of dollars.
Could you take a look at Micron Technology Inc? - MU
It's on my list. But I'd never invest.