I was admiring the work of art I just created.
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Sounds cheesy, right? But it is true. I was reading my articles, playing with my features, and even looking at the raw data in my database.
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You see, right now, I'm updating my data to be more rich and accurate. Specifically, I'm using a Large Language Model (LLM) to apply more accurate tags to what industries a stock belongs in.
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When I first saw this, I thought to myself "this looks right". So how could my updated LLM improve it? It was here where I discovered something interesting. The new model applied a lot more tags to Amazon!
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Amazon Industries After. There's more not shown.
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And I looked at it and thought to myself, which representation is more true?
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Well Amazon is absolutely an AI company. With its cloud platforms and investments in AI such as CodeWhisper, nobody could deny Amazon that fact. Amazon also does logistics, messaging, gaming, healthcare, and cloud computing. While some tags on the after picture are a bit of a stretch, the fact is that it seems more accurate than the initial representation. I'm not mad at this response.
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And with this came the realization: Amazon is the most influential stock in the world.
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What is Amazon? Analyzing the Company Performance using its Earnings Statements
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Amazon started off selling books. It then started sending out whatever else people would buy: batteries, pet food, groceries, and even apparel. They eventually started experimenting with cloud computing with AWS, which caused its revenue (and income) to soar! Now, Amazon is so large its practically unavoidable. The websites you use rely on Amazon and AWS. The TV shows and movies that you enjoy run on Prime Video. They're in music, retail, ecommerce, advertisements, and just about any other industry you can imagine.
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How much money does Amazon make with all of this? Let's ask Aurora, the AI-Powered research assistant.
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The full response from the model is as follows:
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AMAZON INC (AMZN) Summary:
* Market Cap: $1,326,530,769,152
* PE Ratio: 133.47
* PS Ratio: 9.22
* Net Income: $9,879,000,000
* Revenue: $143,083,000,000
* Free Cash Flow: $8,710,000,000
* Net Change in Cash: Not available
* Earnings Per Share: $0.96
* EBITDA: $23,319,000,000
* Gross Profit Margin: 47.57%
* Operating Margin: 7.82%
* Return on Equity: 5.40% Pros:
* Strong Revenue: Amazon's revenue is substantial, indicating a healthy demand for its products and services.
* High EBITDA: The EBITDA of $23,319,000,000 reflects strong operational earnings before accounting for interest, taxes, depreciation, and amortization.
* Solid Gross Profit Margin: With a gross profit margin of 47.57%, Amazon is efficiently managing its production costs. Cons:
* High PE Ratio: The high price-to-earnings ratio of 133.47 suggests that the stock may be overvalued relative to its earnings.
* Low Earnings Per Share: The earnings per share of $0.96 indicates lower profitability on a per-share basis.
* Low Return on Equity: The return on equity of 5.40% suggests that Amazon is generating relatively lower profits from shareholders' equity.
Summary: Amazon's financials show strong revenue and EBITDA, indicating healthy operational performance. However, the high PE ratio and low earnings per share raise concerns about the stock's valuation and profitability. Investors should carefully consider these factors before making investment decisions. Rating: 4/5 (This is not financial advice. Please conduct thorough research before making any investment decisions.) For more detailed information, you can refer to the source provided: - SEC Edgar Filing
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I've highlighted the important things to keep in mind. Not only is Amazon involved in nearly every industry. But it makes a bucketload of money doing so.
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I mean, they're almost unavoidable. And while I'm not trying to claim Amazon has the best financials in the world, we can't discount how efficient their operations are. I don't think a single other company, Microsoft, Google, or Apple, has their hands in as many pies as Amazon, and they're doing a good job. The story of Amazon will be in textbooks for many years to come.
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Finding other money-printing machines
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While Amazon is amazing, it's not the only stock that's capable of printing money. Let's try to find another one.
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Here is the summary of the financial data for the stocks that make more than $100 billion revenue and are sorted by profit margin in descending order:
1. Apple Inc. (AAPL)
- Description: Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers a range of products and services including iPhone, Mac, iPad, wearables, AppleCare support, cloud services, App Store, Apple Music, Apple TV+, Apple Card, and Apple Pay. It serves various markets and distributes products through retail and online stores.
- Latest Revenue: $119,575,000,000
- Latest Net Income: $33,916,000,000
- Profit Margin: 28.36%
- Financial Date: December 31, 2023
2. Amazon.com, Inc. (AMZN)
- Description: Amazon.com, Inc. engages in retail sales, advertising, and subscription services through online and physical stores globally. The company operates through segments like North America, International, and Amazon Web Services (AWS). It offers electronic devices, media content, advertising services, and Amazon Prime membership program.
- Latest Revenue: $169,961,000,000
- Latest Net Income: $10,624,000,000
- Profit Margin: 6.25%
- Financial Date: December 31, 2023 3.
Walmart Inc. (WMT)
- Description: Walmart Inc. operates retail, wholesale, and other units worldwide through segments like Walmart U.S., Walmart International, and Sam's Club. It offers a wide range of products including groceries, consumables, health and beauty aids, home improvement items, consumer electronics, financial services, and more.
- Latest Revenue: $160,804,000,000
- Latest Net Income: $453,000,000
- Profit Margin: 0.28%
- Financial Date: October 31, 2023
These are the summaries of the financial data for the stocks meeting your criteria.
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This is something that was shocking to me. In total, there are only 3 companies in the world that make more than $100 billion in revenue. Walmart makes as much money as Amazon, but makes a tiny fraction of its income. Apple, however, is a lot more profitable than Amazon, which makes sense considering their market cap.
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Aurora, the AI Chat Assistant, thinks that Amazon is a decent investment. It has healthy financials, large cash flows, high profit margin (though not as high as Apple), and strong revenue. It's also extremely well-diversified, with bets in an extremely large number of industries.
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This article shows how we can streamline financial research using AI. Instead of parsing through earnings statements, we get rich historical data within seconds by simply interacting with an AI. I can't understate how this is huge! It's intuitive to use, lightning fast compared to any alternative, and just fun. Finding new investment opportunities has literally never been easier. You're witnessing the beginning of how AI will revolutionize finance!
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Disclaimer: The content provided in this post is for informational purposes only and is not intended as financial advice or a recommendation to buy or sell any securities. I am not a financial advisor. The insights and analysis shared are meant to demonstrate the capabilities of NexusTrade in automating financial research. It's important to conduct your own due diligence and consult with a professional advisor before making any investment decisions.
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