Often times you will hear or have read about a company, and somewhere in your brain you store the information. Then you will see it more and it slowly comes to the forefront for you to decide what to do with your investments. Once you own an investment you can hold it or do nothing, but you need reinforcement to hold onto it or seek alternatives. One company you will know is Amazon and for many years, it spent more money than it made or was in a growth phase. Over the past 3 years it has changed to more areas of profitablity.

In an article from Reuters, Amazon.com Inc beat 4th quarter estimates as new generative AI features in its cloud and e-commerce businesses spurred robust growth during the holiday season.

AWS or Amazon Web Services is the world’s largest cloud services provider. The division posted revenues of $24.2 billion up 13% which was in line with expectations of the analysts. (the cloud services of Microsoft and Google and 2nd and 3rd).

Amazon recently made an investment in AI company called Anthropic which is chat-bot maker. The products will be used in the cloud.

Most people know Amazon because it is the 2nd largest shipper of goods behind the US Post Office and Amazon has changed strategy to build smaller fulfilment centers with the top 10,000 items closer to customers. In this fashion, the last mile delivery is either the same day or next day. During the key Black Friday and Cyber Monday days, customers worldwide bought over 1 billion items from Amazon.

If you buy regularly through Amazon, the average person will have a Prime membership because of the free shipping. Prime membership is a key strategic asset for Amazon. Generally, anyone with a Prime membership will have a reasonable income, which means as a group they are valuable to advertisers. Amazon has the 3rd largest advertising revenues behind Google and Meta. Not every company uses Amazon, but the service Buy with Prime enables subscribers to receive same day or next day delivery for merchants not on Prime.

In addition, with Prime membership comes other features such as Prime Video. Similar to Netflix, Amazon introduce a higher fee for no ads which is expected to bring in $3 to $4 billion in revenues.

Linking to dividend paying stocks, all these companies have assets that generate excess income to earn profits. In the case of Amazon, it has taken years of spending money to be in a position to realize the ability to make profits, but it will be a juggernaut similar to Microsoft and Google. Meta recently declared a 50 cent dividend will this force the other big tech companies to do the same? Doing your homework on how the assets increase revenues to generate profits to eventually pay dividends is the key.

There are more questions than answers, till the next time – to raising questions.