Cathie Wood and Warren Buffett share few investment traits. Buffett helped build Berkshire Hathaway into one of the world’s most successful investment firms by owning mostly blue-chip stocks to generate steady cash flow. By comparison, Wood’s Ark Invest navigates the capital markets through a series of high-risk, high-reward opportunities in emerging market themes such as artificial intelligence (AI) or biotechnology.

Nevertheless, Berkshire and Ark Invest both own positions in “Magnificent Seven” member Amazon (NASDAQ: AMZN). While it’s not a major position for either investor, I think there are several reasons why both Wood and Buffett are attracted to such a stock.

Below, I’ll detail what catalysts Amazon has and why I see the stock as an absolute bargain right now.

One of the things that makes Amazon so unique is its multifaceted platform. While the company relies on its e-commerce marketplace and cloud computing enterprise for the majority of its growth, Amazon also has success from its Prime subscription service, entertainment and streaming, and even advertising.

The table below breaks down Amazon’s revenue growth across its reportable segments through the first six months of 2024:

Category

Six Months Ended June 30, 2023 (in millions)

Six Months Ended June 30, 2024 (in millions)

Change

Online stores

$104,062

$110,062

6%

Physical stores

$9,919

$10,408

5%

Third-party seller services

$62,152

$70,797

14%

Advertising services

$20,192

$24,595

22%

Subscription services

$19,551

$21,588

10%

AWS

$43,494

$51,318

18%

Other

$2,371

$2,522

6%

Consolidated

$261,741

$291,290

11%

Data source: Amazon.

The high-level takeaway is that Amazon is witnessing growth across its entire platform. But looking deeper, there are some more important takeaways.

Despite a troubled macroeconomy over the last couple of years, Amazon is still managing to generate growth its e-commerce and physical storefronts, as well as Prime subscriptions. I think this trend underscores the resiliency of the consumer, even in an inflationary environment. Moreover, I see the Federal Reserve’s recent interest rate tapering as a tailwind that could spark even further acceleration for Amazon’s online shopping empire.

Another great takeaway is that the company’s cloud computing business, Amazon Web Services (AWS), is growing by double-digit percentage points and accelerating materially compared to 2023. What’s even more important is that operating income from AWS — Amazon’s biggest profit machine — returned to positive growth year over year compared to last year.

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