Microsoft and Amazon are the two largest cloud brands in the world. In this newsletter, we take a closer look at these 2 behemoths.
Both returned handsome profits to shareholders over the long term.
How do tech firms make money? The biggest sources are consumer electronics (Apple and Samsung), e-commerce (Amazon) and Ads (Google). But these 3 are fairly old-school business models which have been around for decades. Cloud is ranking as the 4th biggest source among big tech firms, but it’s catching up very quickly.
How does Microsoft make money then? Cloud is by far the biggest single unit, followed by its traditional products like Office365 and Windows OS.
How does Amazon make its money? E-commerce is by far the largest, totalling $222B from its own stores, and $103B from third parties who sell through Amazon. Cloud is coming in at 3rd, at $62B.
AWS and Azure are by far the top 2 cloud players in the market, at over 50% of the total market.
It’s impressive how quickly Amazon is catching up with Microsoft on cloud revenue run-rate.
Finally, who’s winning on quality, value and momentum? Using our quant rankings, Microsoft wins by a big margin on quality. Both stocks are expensive on value. Amazon is doing poorly on momentum.
Have a great weekend!
Truman & Amara 🙌
Genuine Impact Limited is an appointed representative (FRN 976025) of New Horizon Global Advisory Limited which is authorised and regulated by the Financial Conduct Authority (FRN 927966).
Genuine Impact helps you understand the different investment options before you decide for yourself how to invest your money. We do not tell you what to do or which products to buy. We have not assessed your investing knowledge and experience, your financial situation or your investment objectives. Therefore you should ensure that any investment decisions you make are suitable for your personal circumstances. If you are unsure about the suitability of a particular investment, you should speak to a suitably qualified financial adviser.
Remember that investments can go up and down in value, so you could get back less than you put in.
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