Today, AI and Machine Learning are the talk of the town. The launch of ChatGPT has set a milestone in the AI industry. Also, it has revealed new dimensions that businesses can opt for to multiply their business and growth. So, Amazon has become many of these tech giants that crafted new AI-based avenues for their business and successfully hit the jackpot. The stock earnings of Amazon have improved significantly.
Recently, stats show that Amazon’s stock inched up and it is because of its AI-driven growth. According to Forbes, Amazon’s shares have risen even above 15% in the first four months of this year (2024). This is going to be the topic of our discussion today on how AI, recent technology, and SaaS have played a role in surging the growth of Amazon—an e-commerce and cloud services provider.
The New Cost-Cutting Strategy of Amazon
The business strategy matters a lot when it comes to the success and growth of a business. Many people give credit for the recent success and stock earnings of Amazon to its new CEO Andy Jassy. However, it is also a fact that before he joined Amazon, a decade ago, Amazon was having far more success than now. Also, experts say that his strategy to cut costs has contributed to this improvement in AMZN stocks. However, no matter what, it was a good start for Amazon.
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Generative AI and Stock Earnings of Amazon
As Amazon’s stock continues its ascent, the significance of generative AI becomes increasingly evident. Using sophisticated algorithms and machine learning techniques, generative AI plays a central role in optimizing various facets of Amazon’s operations, ranging from supply chain management to the enhancement of product recommendations to customers for its e-commerce platform. By leveraging generative AI, Amazon effectively finds consumer preferences with remarkable precision that bolsters investor confidence and drives sales through advanced data analysis and predictive modelling. Moreover, the integration of generative AI across Amazon’s digital platforms, including image recognition and natural language processing, enhances user experience, fostering heightened consumer engagement and loyalty. This symbiotic relationship between generative AI and Amazon’s strategic endeavours propels the company’s growth trajectory and reinforces the upward momentum of its stock value.
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Amazon Shares on the Nasdaq Stock Exchange
According to Statista, The value of Amazon stocks traded on the Nasdaq stock exchange showed notable fluctuations but generally experienced growth from 2010 to early 2022. In November 2021, they reached a high of $175.35 per share. Subsequently, Amazon’s stock price experienced further fluctuations and reached another peak, reaching $180.38 per share by the end of March 2024.
When comparing the boost in the shares and stock earnings of Amazon a couple of years back to its present share prices, it is important to never ignore the Pandemic factor that not only made but also broke many businesses. Amazon being an online service provider succeeded in boosting its profits as well as share values because nations were confined. Platforms like Amazon were needed for web services or e-commerce services. So, the improvement in the business was evident.
AWS was needed so that businesses could run effectively at that time. Coming towards their e-commerce platform, it was also a need of the time. People could not visit markets. So, Amazon became the centre of attention for online shoppers. However, when the havoc of the pandemic completely ended in 2021, the increase in offline shopping costs resulted in layoffs. Still, it was a short-lived plunge in the stock prices. Amazon came out of that phase and ever since making growth and improvement in stocks.
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What is Lying Ahead for Amazon?
Now that everyone knows that Amazon stock earnings have improved significantly. many investors are showing keen interest in Amazon shares, however, they are also thinking about the future lying ahead for Amazon.
- Recently, AI algorithms caught the attention of SaaS businesses across the market, the team Amazon also geared up to find its margin to make money from this trend. However, later, they became the trendsetters. They noticed the keen interest of this community that was using Amazon AWS services in generative AI. They facilitated them, and today, the CEO Jassy claims that those who are using Amazon AWS services and generative AI have contributed a lot to the company’s revenue. Also, experts have reported that Amazon has left Microsoft behind in sales based on generative AI.
- After ChatGPT was introduced in the market, there was a sudden hype about using chatbots for customer care, support, and whatnot. Amazon introduced its chatbot named Amazon Q. For its paid version, they charge a few dollars, and the user gets an ultimate assistant that is there for him for web development and AWS journey throughout. It is a great way to monetize on AI features and of course, it has contributed to improving Amazon shares prices in stock.
- When it comes to Amazon, we cannot complete our discussions without shedding light on its e-commerce services. So, Amazon introduced a chatbot as a shopping assistant which is Rufus. It has taken the customer experience to a new height. Many competitors are just planning to come up with such ideas to boost their sales as well. However, Amazon has already aced.
- Last but not least, it is important to know where to invest money. Many businesses are blindly following the trend of AI. However, Amazon invested in the right AI tools at the right time. Experts say that Amazon invested about $4 billion to purchase a chatbot that it has effectively used to let its customers grab attractive opportunities.
Amazon Buying Back Stocks?
Many people say that just like Meta and Alphabet, Amazon will also spend more on buying back stocks. However, it has not done that so far. Probably, Amazon is having another surprise for the cloud computing and web services providers in the market. Because seemingly it is a good time for Amazon to buy back stocks and pay dividends like many others are doing. However, there is no such news of that. So, it will be too early to say anything like that.
Many experts at Amazon are also saying that Amazon will keep going on the same strategy to improve growth rather than improving dividend. However, the point is Amazon has set a benchmark for all in the market, and its next move is yet to be seen.
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Conclusion:
The role of AI and generative AI is evident from the success of Amazon in the start of this year. Amazon has set a standard for many other cloud computing and services providers. Today, improving stocks is no easy. However, AI has played its role. So, the point is not to just follow the trend of AI and machine learning rather one should find out the place where AI can give business a push in the right direction, of course just like Amazon.
