Amazon (NASDAQ:AMZN) decision to promote the head of Amazon Web Services (AWS), Andy Jassy, as the company’s new CEO was an excellent call. As a result, I’m optimistic about the long-term outlook for Amazon stocks.
History suggests that individuals with extensive technical backgrounds tend to create better CEOs of technology companies than those without. Although Jassy did not have a technical education, the many years he spent as head of AWS have, in my opinion, given him an extensive technical background.
Benefit for CEOs for technical background
Jassy tog at AWS in 2003, when he was still in his early 30s. As a result, I think the executive who received both a degree in liberal arts and an MBA from Harvard probably has a great deal of technical knowledge.
Like a Looking for Alpha blogger, Damon Verial, noted earlier this month, Microsoft (NASDAQ:MSFT) fought under Steve Ballmer when Bill Gates resigned; Corresponding Apple (NASDAQ:AAPL) struggled to produce new intellectual property under Tim Cook when Steve Jobs resigned. “Google has not produced anything significant since (Sundar) Pichai replaced (Larry) Page, ”he wrote about the shift change at Alphabet (NASDAQ:GOOGL).
Ballmer’s background was primarily in sales, while Cook’s career was focused on supply chain management. Another CEO who has struggled in recent years was Intel (NASDAQ:INTC) Bob Swan, whose background was mostly in economics.
Conversely, Gates and Jobs both had technical backgrounds. So did Google’s Page, which did a very good job during its time as the company’s manager and Satya Nadella, who turned Microsoft around. In the chip room, Nvidia (NASDAQ:NVDA) CEO Jensen Huang has a technical background and the company has had enormous success.
Key player in AWS success
AWS is by far the leader of the highly competitive cloud sector. Earlier in February, research analysts at Canalys reported that AWS has a market share of 31%, with Microsoft’s Azure coming in second with 20%.
Last quarter, AWS generated about $ 12.5 billion in revenue, up from $ 7.5 billion two years earlier. Operating profit increased to approx. $ 3.75 billion. Dollars mod ca. 1.25 billion $ Two years earlier. AWS generates the majority of the company’s profits.
Jassy should get a great deal of credit for AWS ‘success. In addition, the device’s star list indicates that he can effectively lead a large technical organization like Amazon.
New interest in video games
During his last decade as CEO of Amazon, Bezos launched many initiatives that did not seem to gain much traction, such as Harbor health insurance company and an attempt to sell prescription drugs. Very few of Bezo’s initiatives seemed to focus on technology in general or AWS in particular.
Jassy may seek to launch more tech-oriented initiatives, such as software-as-a-service products or data-oriented offerings. In fact, he has already stated that video games will be a focus area for Amazon.
And the new CEO, who is probably much hungrier for success than Tycoon Bezos has been for the past many years, is likely to work much harder than his predecessor did to ensure his initiatives are extremely successful.
The bottom line on Amazon stock
Amazon has chosen a great successor to Bezos, one that is will likely continue to manage AWS very well, greatly expands the company’s technical offering and works very hard to ensure the success of his initiatives.
Meanwhile, Donald Trump’s exit from the White House has removed a major threat that had been looming over Amazon stock. E-commerce and the cloud must both continue to grow very rapidly. Given these points, I recommend that long-term investors seem to be buying Amazon stocks at this point.
At the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Larry Ramer has been researching and writing articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry started writing columns for InvestorPlace in 2015. Among his very successful, conflicting choices have been GE, Sun Storage and Snap. You can reach him on StockTwits at @larryramer.
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