Amazon highlights new growth areas with AI wonder weapon

Amazon sets new standards in software development with its latest innovation, a virtual assistant named Q. This technological masterpiece can answer questions about a company's internal data and policies and provide computer-generated code to accelerate software development. Notably, Amazon claims that Q boasts the highest code acceptance rate in the industry, saving the company an astounding $260 million and 4,500 developer years on a single project. The impressive performance of Amazon's web service AWS is also reflected in its recently released quarterly figures. With record revenues of $27.4 billion in the third quarter of 2024, AWS experienced a growth of 19.1% compared to the previous year. This development is primarily driven by the booming AI sector within AWS, which is currently growing at triple-digit percentages year-over-year and three times faster than the cloud segment in a similar development phase. Not only does the cloud sector benefit from artificial intelligence, but Amazon's E-commerce sector, with revenues of $61.4 billion, could also be further optimized through the strategic use of AI. This includes the newly introduced "Private Investigator" project, which uses AI and computer vision to identify defective products in logistics centers to reduce returns. This is complemented by the virtual shopping assistant Rufus and the powerful seller assistant Amelia, which help companies become more efficient and reduce costs. Amazon's advertising business is also experiencing sustained growth. With 3.4 billion monthly visits to Amazon.com, and advertising on platforms like Prime Video and Twitch, Amazon generated $14.3 billion in revenue in the third quarter. As advertising on platforms like Prime Video is still in its early stages, there is significant growth potential anticipated. The availability of AI tools for creating engaging advertising material could further increase Amazon's share of the advertising market. Despite a high current price-to-earnings ratio of 44.7, Wall Street's forecast for the coming year suggests further earnings growth, implying significant potential for price gains. Given AWS's growth momentum and strategic efficiency improvements in e-commerce, the company remains attractive to investors.