8. Amazon.com Inc. (NASDAQ:AMZN)
Market snapshot: $272.61, down 1.73%
Amazon.com, Inc. (NASDAQ: AMZN) takes the eighth position after its shares gained approximately 17% over the previous month following a powerful earnings-driven rebound. The move was particularly notable because Cramer had recently grouped the company with Alphabet Inc. (NASDAQ: GOOGL) and Meta Platforms, Inc. (NASDAQ: META) under the rather dramatic label of the “Walking Dead.” The description referred to a group of hyperscalers whose enormous artificial intelligence spending had temporarily fallen out of favor with investors. It did not mean that the companies were financially distressed. Instead, it captured a period when Wall Street appeared unwilling to reward even the strongest technology businesses while questions grew about capital expenditures, free cash flow and the time required to earn acceptable returns from AI infrastructure.
Amazon.com, Inc. (NASDAQ: AMZN) changed that conversation with its latest earnings report. Amazon Web Services recorded 37% year-over-year sales growth to $42.2 billion, its fastest growth rate in 18 quarters, while total company revenue reached $200.6 billion. The performance suggested that the enormous demand for cloud computing, generative AI models, enterprise software and data-center capacity was beginning to show up more clearly in operating results. It also reminded investors that Amazon.com, Inc. (NASDAQ: AMZN) is not simply an online retailer. The company operates one of the world’s largest cloud-computing platforms, a fast-growing advertising business, a global logistics network and an expanding custom-chip operation.
The most unusual part of the quarter was the company’s $53.4 billion in non-operating pre-tax other income, primarily connected to its investment in Anthropic. That helped push net income to $62.6 billion, although investors should not treat the gain as ordinary or recurring operating profit. The more durable Anthropic benefit may come from the AI developer’s commitment to spend more than $100 billion on AWS technologies over ten years and secure as much as five gigawatts of computing capacity using Amazon Trainium chips. The arrangement gives Amazon.com, Inc. (NASDAQ: AMZN) exposure to Anthropic’s private-market valuation and to its demand for cloud infrastructure. However, the company’s heavy spending has pressured free cash flow, illustrating why the stock does not rank higher. Amazon.com, Inc. (NASDAQ: AMZN) has returned from the so-called “Walking Dead,” but it must still prove that its historic AI investments can consistently produce cash rather than impressive accounting gains alone.
