Amazon stock (NASDAQ:AMZN) has lately been one of the most prominent turnaround stories in technology. The online seller was a forerunner of e-commerce in North America and many other areas of the globe. It eventually became a conglomerate due to its participation in the creation of the cloud.

However, rising e-commerce losses imply that Amazon Web Services (AWS) now accounts for most (or occasionally all) of the company’s income. This does not eliminate the investment thesis for Amazon, but benefiting from Amazon stock (NASDAQ:AMZN) will require investors to change their perspective on the internet and direct marketing retail stock.

Market Analysis of Amazon Stock

Amazon’s e-commerce activities are currently losing money after years of success. Despite the losses from online shopping, the company’s reputation is the foundation for its genuine growth drivers. In a roundabout way, its online presence serves as an unofficial Amazon advertising effort, preserving its name in the public’s memory. It also generates significant market power, enabling it to compete fiercely with leading merchants like Walmart and Costco.

Furthermore, e-commerce allows Amazon to sell advertising on its website. The public was unaware of Amazon’s ad income until recently due to its position in both the North American and International markets.

Despite the success of advertising, AWS is the most notable bright light. Despite accounting for just 16% of Amazon’s sales, it is the fastest-growing category, expanding 35% yearly. It was also the only section to achieve positive operating income this year. It also recorded a 31% operating margin over the previous 12 months. For years, that margin has helped it earn the company’s profits.

Amazon Stock seems to be a good investment.

The “loss leader” viewpoint should alter the narrative around Amazon stock(NASDAQ:AMZN). When investors purchase Amazon for AWS, they suddenly receive the e-commerce operation “for nothing.” A low P/S ratio and the digital ad sector development help support the investment thesis.

Finally, investors should remember that Amazon’s operations are always changing. Suppose Amazon’s e-commerce businesses can shed their “loss leader” status and return to profitability. In that case, they might act as further drivers to boost the stock.

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