Amazon Earnings Show Why the Stock Is a Buy

Core Insights - Amazon is experiencing broad-based momentum across its diversified business, significantly benefiting from the AI boom and strong performance in both e-commerce and cloud computing [1][4][5] Financial Performance - In the third quarter, Amazon's net sales increased by 13% year-over-year, exceeding $180 billion, with Amazon Web Services (AWS) revenue rising by 20.2% to $33 billion, up from 17.5% growth in the previous quarter [4][6] - Revenue from online stores grew by 10% year-over-year to $67.4 billion, while third-party seller services rose by 12% to $42.5 billion, and advertising services climbed 24% to $17.7 billion [6] - Subscription services revenue reached $12.6 billion, marking an 11% increase year-over-year [6] Market Position - Despite strong performance, Amazon's shares have underperformed the S&P 500 this year, and the stock's forward price-to-earnings multiple remains conservative relative to its growth momentum [2][7] - The company's operating cash flow grew faster than sales during the period, indicating strong financial health and growth potential [7]