☁️ Amazon: Ads Take the Cake
And why Gen AI could drive tens of billions of dollars in revenue
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Amazon (AMZN) recently hit a two-year high, briefly overtaking Alphabet (GOOG) as the world's fourth-largest company—a position it hasn't seen in nearly three years.
The main reason? FY23 was a dramatic turnaround in free cash flow, swinging from a $12 billion deficit in FY22 to a $37 billion surplus in just one year. Amazon’s booming advertising business was one of the factors.
During the earnings call, while discussing this profitability resurgence (even excluding AWS), one analyst inquired about potential plans to return cash to shareholders. CFO Brian Olsavsky’s response was telling:
“We primarily think we have a lot of strong investments in front of us.”
I immediately thought about this Jeff Bezos quote:
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
In an era where tech giants like Meta announce dividends, and others aggressively buy back shares, Amazon’s strategy to reinvest in growth and innovation stands out.
This edition is packed with visuals that dissect Amazon’s financial performance, AWS trends, advertising wins, and workforce dynamics. We’ll also explore the company’s ambition with Generative AI and its potential revenue impact.
Today at a glance:
Amazon Q4 FY23.
Recent business highlights.
Key quotes from the earnings call.
What to watch: Q, Rufus, and Ads.
