Tech Titans Amazon and ASML Show Promise Amid Market Instability

Amazon's AWS and ASML's lithography growth present investment opportunities. With AI propelling demand, both companies are set for potential long-term profit increases. Investors should take note of these resilient stocks in the current market.

Date: 06-05-2025

AI Rating: 8

Amazon's Performance and Potential
Amazon is continuing to showcase strength in its Amazon Web Services (AWS) segment, where it reported impressive revenue growth of 17% year-over-year, hitting $117 billion in annualized revenue. With a record operating margin of around 40%, this division alone could generate between $46 billion to $47 billion in operating income over a full year. The long-term potential is significant, as Amazon is expected to achieve $100 billion in operating income through cloud computing in the next five to ten years.

Profit Margins and Net Sales
Amazon’s North American retail division also posted an 8% increase in net sales, bolstered by an 18% growth in advertising revenue. Although tariffs and supply chain challenges pose potential risks, Amazon is well-positioned to navigate these issues, maintaining high profit margins despite external pressures. Investors are encouraged to consider the current price-to-earnings (P/E) ratio of 34 in light of Amazon’s expected growth trajectory, down from its historical average of 55.

ASML's Market Leadership
On the semiconductor front, ASML is carving out a unique position with its advanced lithography machines, which are essential for producing cutting-edge chips. Though ASML experienced a revenue dip in the previous quarter, its ten-year revenue growth has been impressive, increasing by 351%. The company anticipates growth in revenue to between $50 billion and $68 billion by 2030.

Conclusion
Both Amazon and ASML exhibit strong fundamentals and potential for growth, particularly in relation to the AI boom. These catalysts in their respective markets could keep their stock prices rising in the coming months. While the P/E ratios suggest that these stocks are not trading at a bargain, their sustainable growth prospects and dominant market positions present valuable opportunities for long-term investors.

Stocks: AMZN ASML