Before Amazon.com Inc (NASDAQ:AMZN) started reporting AWS segment data, fulfillment was a big issue for AMZN stock owners.
AWS revenue growth has since decelerated and is unlikely to keep driving Amazon stock higher for much longer. We discussed this very topic during a post in early May. If AWS is not carrying the load, with its growth decelerating, then Amazon.com Inc (NASDAQ:AMZN) will naturally start to stand out. Those flaws become a bigger deal.
As a result, the following chart might be meaningful to some AMZN stock owners.
Amazon.com Inc (NASDAQ:AMZN) is rapidly accelerating its fulfillment spending.
While year-over-year increases in revenue and expense are important metrics, it can also be misleading it the comparable period is unusually strong or weak. That’s why it is wise to look on bi-annual basis as well.
The trend above clearly paints a picture of accelerated fulfillment expense growth on behalf of Amazon.com Inc (NASDAQ:AMZN), with no end in sight. We believe the spending has not posed any issue for Amazon stock because of the performance at AWS. However, if AWS revenue continues to decelerate, AMZN stock owners could find the conversation shifting back to fulfillment.
For a final illustration, it is worth noting that for as fast as Amazon.com Inc (NASDAQ:AMZN) has grown revenue over the last couple years, fulfillment expense growth has been much greater. At the very least, AMZN stock owners should keep this in mind, especially considering the problems that fulfillment caused Amazon stock back in 2014.