Amazon.com (AMZN) CEO Andy Jassy issued his 2023 Letter to Shareholders this week, highlighting the company's strong performance in 2023 – a year in which its stock soared 81%. The executive also outlined opportunities the company has in 2024 and beyond.
"Overall, 2023 was a strong year, and I'm grateful to our collective teams who delivered on behalf of customers," Jassy asked. "These results represent a lot of invention, collaboration, discipline, execution, and reimagination across Amazon. Yet, I think every one of us at Amazon believes that we have a long way to go, in every one of our businesses, before we exhaust how we can make customers' lives better and easier, and there is considerable upside in each of the businesses in which we're investing."
Amazon's stock is up more than 25% so far in 2024 to flirt with the $2 trillion market cap level and Jassy thinks there are plenty of ways for the company to continue enhancing its businesses for customers and shareholders.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How does Amazon aim to improve in 2024?
Amazon is not done lowering costs. Jassy said the company has identified several areas where it can cut costs within its fulfillment network while also improving delivery times for customers, including the progress it's made with its drone delivery business, Prime Air.
"Need throat lozenges, Advil, an antibiotic, or some other medication?," Jassy asked. "Same-day facilities already deliver many of these items within hours, and that will only get shorter as we launch Prime Air more expansively."
Jassy said Amazon Web Services (AWS) saw "cost optimization attenuating, new deals accelerating, customers renewing at larger commitments over longer time periods, and migrations growing again" at the end of 2023, and added that the business unit was seeing significant traction in its generative artificial intelligence (GenAI) offerings.
The executive spotlighted Amazon's international growth initiatives, saying that the company has "high conviction" that emerging geographies in which the company operates, including India, Brazil, Australia, Mexico, the Middle East and Africa "will continue to grow and be profitable in the long run."
Additionally, Jassy said Prime Video "can be a large and profitable business on its own." He also noted the company would continue its journey of commercializing Project Kuiper, which has the goal of providing 400 million to 500 million households with broadband connectivity that don't have it today.
"There has never been a time in Amazon's history where we've felt there is so much opportunity to make our customers' lives better and easier," Jassy said. "We're incredibly excited about what's possible, focused on inventing the future, and look forward to working together to make it so."
Growth initiatives are good news for Amazon investors
Amazon has already generated tremendous returns for long-term shareholders. By the numbers, a $1,000 investment in AMZN 20 years ago would be worth roughly $147,000 today. And all of the company's future growth initiatives could keep the wind at the stock's back.
What's more, Jassy noted that Amazon's free cash flow surged to $35.5 billion in 2023 vs negative $12.8 billion in 2022.
"Free cash flow (FCF) is one of the most important financial metrics you can study, especially if you're a buy-and-hold investor," writes Kiplinger contributor Will Ashworth. Free cash flow is what's left over after a company pays its expenses, interest on debt, taxes and long-term investments, and if it generates more cash than needed to cover its bills, "it can do a number of useful things with it, such as pay dividends, buy back its stock, acquire other companies, expand its business and knock out its debts."
Related Content
-
Bullish IPO: Should You Buy BLSH Stock?Wall Street is buzzing about the Bullish IPO, with the Peter Thiel-backed crypto company set to start trading today, August 13, under the ticker "BLSH."
-
How the 2025 Child Tax Credit Rules Impact Single ParentsTax Credits New changes to family tax credits, like the Child Tax Credit, will impact the eligibility of some households.
-
Bullish IPO: Should You Buy BLSH Stock?
Wall Street is buzzing about the Bullish IPO, with the Peter Thiel-backed crypto company set to start trading today, August 13, under the ticker "BLSH."
-
How to Build Your Financial Legacy Three Piggy Banks at a TimeA wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
July CPI Report Ignites a Risk-On Rally: Stock Market TodayMarket participants price out worst-case scenarios for tariffs and inflation and will now turn their attention to employment and growth.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts SayThe July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
-
Stocks Slip Ahead of July CPI Report: Stock Market TodayThe latest inflation updates roll in this week and Wall Street is watching to see how much of an impact tariffs are having on cost pressures.
