AWS Profits Are Shrinking, Making Amazon Stock Tough to Own
You know it best as the king of e-commerce. But for the past several years, the crux of the bull thesis for Amazon (NASDAQ: AMZN) has been Amazon Web Services (AWS), which is not only the leader of the cloud computing market but also Amazon's biggest moneymaker ... by a country mile.
Now, however, this engine of Amazon's profits is running into a headwind of its own. While its revenue continues to rise, its profitability continues to shrink. Without any viable explanation as to when or even if the company can reverse this bottom-line trend, Amazon shares are tough to own.
The chart below says it all: AWS has grown every single quarter it has existed, all the way through the first quarter of this year. Its operating income, however, peaked at the start of 2022 and has steadily dwindled since then. Operating profit margin for the segment now stands at multiyear lows on the order of 24%.
Source Fool.com
