Amazon's Stock Price Could Rise Further by Year-End

Amazon's stock price surged following the release of second-quarter results and has increased approximately 15% compared to the beginning of the year. According to The Motley Fool, the stock price could continue to rise.

The main driver is the performance of Amazon Web Services (AWS). In the second quarter, AWS revenue grew 37% year-over-year, reaching $42.2 billion. This business accounted for approximately 60% of Amazon's operating profit.

Demand for AWS is also being fueled by the rapid development of artificial intelligence. Companies need significant computing resources to run artificial intelligence models and other applications, and Amazon provides these resources.

Demand is so high that Amazon plans to spend approximately $220 billion this year on developing data centers and other technological infrastructure. According to the company's CEO, Andy Jassy, despite this, AWS's existing resources will not be sufficient to fully meet demand.

The Motley Fool also draws attention to Amazon's stock valuation. The company's stock price is trading at approximately 21 times its earnings, while the S&P 500 average is 25.3.

Source: Yahoo Finance