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Amazon.com, Inc. (AMZN) Stock Is Becoming an AI Juggernaut

Artificial intelligence initiatives could end up being the next big driver of AMZN stock

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Amazon.com, Inc. (NASDAQ:AMZN) has lost some of its mojo since its second-quarter earnings report, with AMZN stock down more than 8% since then. CEO Jeff Bezos is no longer the richest person in the world … though no one’s going to be holding a bake sale for him any time soon.

Amazon (AMZN)
Source: Shutterstock

Right now, it’s best to keep things in perspective. Amazon stock still is up an impressive 28% in 2017 — better than other top tech operators including Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOGL). And the earnings report showed that Amazon’s growth story is still alive, with top-line growth of 25% to $38 billion.

The big issue, of course, was the bottom line. Earnings of $197 million, or 40 cents per share, were far less than Wall Street’s expectations for $1.42 per share in profits.

But let’s get real. Amazon has been pushing out monstrous profits on the back of Amazon Web Services for a couple of years now, and the time was ripe for AMZN to start pumping money back into growing some of its businesses — including gearing up for the all-important holiday season.

Another driver for Amazon’s increased spending is innovation. Perhaps the most important effort — in terms of long-term prospects for AMZN stock — is on artificial intelligence (AI).

Amazon and AI

The heart of this is Alexa, the “digital assistant” that can process voice commands for things like setting alarms, playing music or answering questions. The technology is part of popular consumer products like the Amazon Echo and Amazon Echo Dot smart speakers. Amazon also has recently unveiled the Echo Show — like an Echo, but including a video screen allowing for hands-free video calls and content viewing from Amazon Video and YouTube.

But when it comes to AI, the key is the ability for the system to learn. The good news for AMZN stock is that the company has been working on this for some time — and has supercharged this by allowing third-party developers to add skills. As of the latest quarter, Alexa added more than 15,000 skills from companies like American Express Company (NYSE:AXP), Uber and Walt Disney Co (NYSE:DIS).

However, there’s another budding prospect that isn’t getting as much attention.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/08/amazon-com-inc-amzn-stock-is-becoming-an-ai-juggernaut/.

©2017 InvestorPlace Media, LLC