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To attain true financial freedom, it is not only important to save, but also to learn how to invest and grow money passively. If you are among those who are lucky enough to keep their jobs during the pandemic, then you must have saved a significant amount due to the restrictions on travel and any form of social gatherings, which is where our usual budget for leisure goes.
Now that your circumstances have allowed you to save, where do you put the money? Although the general economic trend is downward with all the closures, there are still a handful of companies that are making it big. Amazon is one of them, and in this article we tell you what makes Amazon such a fertile soil for your investment.
The pandemic resulted in a boom for Amazon’s e-commerce revenue
The coronavirus pandemic has changed the shopping behaviors of many people. Due to the restrictions on gatherings and face-to-face contact, many citizens resorted to online shopping even for their most basic needs such as groceries. Amazon benefited a great deal from this, and the company’s short-term e-commerce revenue saw massive growth.
However, don’t think that the magic stops there. AMZN’s revenue is forecast to grow 14.98%, and e-commerce is going to be a major driver of this. To get discounts and faster delivery services, many people became members of Amazon Prime over the course of the community quarantines. There are studies that show that Prime members spend twice as much than nonmembers; hence, Amazon is expected to continue enjoying significant growth in the long term.
Amazon’s cloud computing service AWS makes it big
Though it’s known for its e-commerce ventures, Amazon has other revenue streams. One of such streams is its cloud computing service called AWS or Amazon Web Services. According to some reports, AWS is just 11% of the company’s total revenue but it accounts for a staggering 67% of total operating profits.
The company’s cloud computing business is actually the current market leader. Revenue projections for Amazon are higher than that of Microsoft Azure and Google Cloud combined. Aside from this, the whole cloud infrastructure market is projected to grow by at least 32% in 2020.
The company has a diversified portfolio
Given the amount of money they make year after year, it’s not at all surprising that Amazon expands or diversifies its business. Aside from the booming e-commerce and cloud services business, the company now also has stakes in the smart home business through its well-known AI technology Alexa. The company has also ventured into the healthcare business with its online pharmacy called PillPack.
Within its e-commerce framework, there are also significant expansions. Of course, there’s online advertising. The company is now also expanding the list of private-label items that it sells through its platforms.
As far as investing is concerned, it’s good if you stick with companies like Amazon that seem to see more opportunities than threats in the current pandemic situation. While you’re at it, it also pays to avoid the major mistakes when trading or investing.
