Amazon's About to Spend a Lot More. Here's Why That Makes the Stock an Even Better Buy.
Amazon (NASDAQ: AMZN) has been one of the hottest mega-cap stocks on the market. Its shares have soared nearly 20% year to date and are up more than 70% over the last 12 months.
The company revealed in its first-quarter update on Tuesday that it plans to increase capital expenditures in the coming quarters. Does this increased spending diminish Amazon's prospects? Nope. Here's why it makes the stock an even better buy.
Amazon CEO Andy Jassy stated in the company's Q1 conference call that capital expenditures would "meaningfully increase year over year" in 2024 to support growth for its cloud unit, Amazon Web Services (AWS), especially in generative AI. CFO Brian Olsavsky noted that capex in Q1 was $14 billion. He said that's likely to be the lowest quarterly level this year. With 2023 capex totaling $48.4 billion, Amazon will increase its capital expenditures by at least 16%.
Source Fool.com
