Why Does Amazon Attract So Many Investments?
Why does Amazon attract so many investments in nowadays business? In this article, we are going to overview the Amazon-Investments relationship.
Amazon possesses one of the characteristics that individual investors and investors with a long-term perspective look for the most. Its expansion is dependable, and it maintains a steady pace, almost like the ticking of a Swiss watch. Since its initial public offering in 1997, Amazon shares have enjoyed dizzyingly rapid and consistent growth.
Amazon continues to have growth, profitability, and stability prospects that few investment platforms can offer. Investors and financial analysts generally agree that Amazon stock remains an excellent investment. In this article, we will focus on the reasons Amazon has attracted many investments over time. Read along to learn more about exciting add-ons like affiliate link checker!
1. Amazon is much more than just a platform for online shopping.
The common misconception about Amazon is that it’s just an online marketplace, a straightforward eCommerce network that sells goods for a profit. Amazon goes far beyond. Here are some reasons:
- Amazon is the proprietor of Amazon Web Services, which is among the most robust and extensively utilized cloud computing infrastructures in the entire world (AWS).
- AWS had a market share of 31% in 2020, but by the second quarter of 2022, that number had climbed to 33%.
- Amazon’s dominant share of the market for cloud computing services and products.
- According to Statista. “Amazon is continuing to expand its market share while preserving its place as the market leader in cloud computing“.
- The cloud infrastructure provided by Amazon is utilized in its entirety by services such as Netflix. Infrastructure from Amazon Web Services (AWS) is used to support Facebook, Zoom, and LinkedIn. Amazon also provides cloud computing infrastructure to NASA (the National Aeronautics and Space Administration). So that it can perform sophisticated calculations on its global computer network, spanning the globe.
- Every four years, the cloud computing market grows by more than double, and Amazon continues to dominate it.
- Amazon also owns a large number of other companies and subsidiaries, including television and film studios known as Amazon Studios, a video-on-demand platform known as Amazon Prime Video, and a long list of emerging startups and other consolidated companies, such as IMDb, Twitch, Zappos, Ring, Whole Foods Market, and Audible.
2. Amazon Dominates the Ecommerce Sector
A much higher growth rate is expected over the next several years in the online eCommerce market, currently dominated by Amazon. It is anticipated that by the year 2025, it will have achieved a total amount of 1,329.7 billion United States dollars (1.3 trillion), which would indicate a growth of more than 100 percent in the span of only 5 years.
In addition, Amazon holds a market share of over fifty percent in the United States. If stated another way, if Amazon simply maintained its existing level of dominance, it would receive the entirety of fifty percent of the turnover volume making it fertile land for investors.
3. Secure Investment
It is common knowledge that putting money into Amazon is equivalent to putting money into the hands of one of the richest people on the planet, Jeff Bezos.
It is impossible to dispute that Amazon’s founder and current CEO possess exceptional business acumen. Many people believe that Jeff Bezos is one of the most intelligent and successful businessmen in the history of mankind.
You may recall that Bezos founded Amazon in 1994. In just a little over 20 years, he managed to establish Amazon as the dominant firm that it is today, and in the process, he became one of the wealthiest individuals. His goals align with those of any other person who invests in Amazon, which is to continue making money by making Amazon larger and more profitable.
Investing in Amazon is, in a nutshell, the same as investing in one of the most brilliant and successful businessmen in the history of the world.
4. Consensus Among Analysts
There is complete agreement among stock market analysts that Amazon’s share price will keep on climbing at a rapid rate. Regarding purchasing shares of Amazon, there is complete unanimity among the most prominent financial analysts.
The study of 39 financial analysts found that 38 of them either strongly urge the immediate acquisition of the company’s shares or believe that the rise of the company’s stock will outperform that of its rivals. In a circumstance that is quite unusual, not a single financial analyst surveyed has a negative outlook regarding Amazon.
The stock of Amazon is expected to have a promising future in the months ahead, according to financial analysts. Due to its success and the potential returns, it can provide, investing in Amazon has become a popular option.
5. Pandemic Blessing
Amazon saw a huge increase in profits because of the outbreak. Travel restrictions and extended periods in one place resulted in people turning to online shopping, particularly Amazon. A large number of people who had never before made use of the eCommerce site started doing so. This made Amazon come into the spotlight thereby experiencing a huge increase in revenue.
Why Does Amazon Attract So Many Investments? Conclusion
Amazon’s projections for its future revenues and profits look very positive. This will enable Amazon to invest in the development of new products and services, the purchase of new businesses, and ultimately in the company’s own expansion which will in turn attract more investors!