Artificial Intelligence not only excites the investors but also driving technology to new highs. While AI brings some potential growth companies to the fore, indulging in its usage from healthcare to finance, two of such growing companies to invest in are
Amazon.com, Inc. (NASDAQ: AMZN)
Amazon.com, Inc. (NASDAQ: AMZN) reported robust Q3 2024 financials, with net sales increasing 11% YoY to $158.9 billion, slightly impacted by a $0.2 billion headwind from foreign exchange rates. Growth was broad-based across segments: North America sales grew 9% YoY to $95.5 billion, International sales rose 12% YoY to $35.9 billion, and AWS achieved impressive 19% YoY growth, generating $27.5 billion.
Among top growth stocks, its operating income surged 55% YoY to $17.4 billion, driven by margin expansion across all segments. North America’s operating income increased to $5.7 billion (from $4.3 billion in Q3 2023), and International returned to profitability with $1.3 billion in operating income (compared to a $0.1 billion loss last year). AWS remained the most significant profit contributor, delivering $10.4 billion in operating income, a 49% YoY increase. Net income improved to $15.3 billion, or $1.43 per diluted share, compared to $9.9 billion ($0.94 per diluted share) in Q3 2023.
Cash flow generation was another standout, with trailing 12-month operating cash flow up 57% to $112.7 billion and free cash flow rising to $47.7 billion, from $21.4 billion in the prior period. These metrics underscore Amazon’s ability to fund growth initiatives and shareholder value creation while maintaining financial flexibility. Operationally, Amazon continues to drive innovation. The company launched AI-powered features like the "Rufus" expert shopping assistant, Project Amelia for sellers, and new generative AI models in AWS Bedrock and SageMaker. AWS introduced new Graviton4 processors and strategic collaborations with Databricks and Oracle. Prime Big Deal Days achieved record sales, setting a strong precedent for the holiday season. The company also expanded its retail and logistics offerings, including new pharmacy delivery capabilities and investments in the Delivery Service Partner program.
Management remains optimistic heading into Q4 2024, projecting net sales of $181.5–$188.5 billion, a YoY growth of 7–11%, despite minor FX headwinds. Operating income guidance is $16.0–$20.0 billion, representing a significant YoY increase from $13.2 billion in Q4 2023. The forecast reflects expected strength from holiday-driven retail sales, AWS growth, and continued efficiency improvements. Amazon’s Q3 results highlight sustained growth across geographies and business lines, underpinned by a strong balance sheet and strategic investments in technology and customer experience. The combination of diversified revenue streams, innovation, and disciplined execution positions Amazon as one of the best growth stocks to buy now to deliver continued value creation in a dynamic macroeconomic environment.
Advanced Micro Devices (NASDAQ: AMD)
Advanced Micro Devices (NASDAQ: AMD) reported strong third-quarter 2024 financial results, with total revenue reaching $6.8 billion, a 22% year-over-year increase. The company posted a gross margin of 50%, operating income of $724 million, and net income of $771 million. Non-GAAP results showed even stronger performance, with a gross margin of 54%, operating income of $1.7 billion, and net income of $1.5 billion. This growth was driven by strong sales in AMD's data center and client segments, particularly from the high demand for EPYC processors and Ryzen processors. AMD's growth potential in data centers, client, and embedded markets, pointing to the continued demand for advanced computing solutions.
Breaking down the key business segments, AMD's Data Center revenue hit a record $3.5 billion, up 122% year-over-year and 25% sequentially. This surge was driven by the ramp-up of AMD Instinct™ GPU shipments and continued growth in EPYC™ CPU sales. The Client segment also saw impressive growth, with revenue up 29% year-over-year and 26% sequentially, primarily from strong demand for AMD’s “Zen 5” Ryzen processors. However, the Gaming segment faced a significant decline, with revenue falling 69% year-over-year and 29% sequentially due to lower semi-custom product sales. The Embedded segment saw a smaller year-over-year drop of 25%, though it grew 8% sequentially as demand picked up in certain end markets.
AMD also made significant announcements in the AI space, showcasing new products and collaborations at its Advancing AI 2024 event. These included the new EPYC 9005 Series processors and Instinct MI325X accelerators for enterprise AI, along with expanded AI-focused solutions from partners like Oracle, Dell, Google Cloud, and Meta. AMD is positioning itself as a key player in AI infrastructure, with new systems designed for AI workloads and upcoming products aimed at driving AI adoption in cloud, edge, and PC markets. The company is expecting fourth-quarter 2024 revenue to be around $7.5 billion, growth in both its data center and client businesses. The company also announced its plans to acquire ZT Systems to fortify its capabilities in AI and data center.
*All amounts expressed in U.S. dollars.
Source: Company’s Report
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