Andrew Willis: Amazon rallied after its most recent quarterly results, but there could still be some room to run—and not just in retail.
As senior equity analyst Dan Romanoff puts it, "the secular drift toward e-commerce continues unabated with the company continuing to grind out market share gains despite its size." This last quarter, the company surpassed our expectations on the retail front, especially with third-party sellers, and we're also looking out for continued progress in groceries and luxury goods. But the growth story that some investors might be missing is everything that makes these transactions possible.
With a cloud-based infrastructure so big that it doubles as a separate business, valuable advertising opportunities, and control of entry through membership, the company can capitalize on its own e-commerce ecosystem. We believe the trifecta of growth at Amazon—AWS, advertising, and subscriptions—is set to outpace e-commerce itself for the next five years.
From Morningstar, I'm Andrew Willis. Check out Morningstar.ca to watch Stock of the Week: Tesla