Amazon.com Inc.

Moreover, Amazon's industry-leading and highly profitable cloud business Amazon Web Services (AWS) continues to expand rapidly as the pandemic accelerated companies' transition to cloud-based services from on-premise operations. In fiscal 2020, its AWS segment expanded 30%, representing about 12% of the total revenue and near 60% of the total operating income. According to International Data Corp., worldwide public cloud service spending will increase at a 21% compound annual growth rate from 2020-2024. We expect the cloud computing market to strengthen and the few large players, including AWS, will continue to rapidly expand and further their leading market positions. Still, S&P Global Ratings-adjusted EBITDA margins deteriorated 60 basis points (bps) in fiscal 2020 primarily because of increased shipping and fulfillment costs.

...Continued strong growth from the cloud business and solid retail sales expansion will offset near-term cost pressure from escalated shipping and fulfillment cost. Amazon.com Inc. posted solid sales gains of about 38% in fiscal 2020 (ended Dec. 31, 2020) partly because of a surge in its retail sales propelled by the COVID-19 pandemic. Online store and third-party sales accelerated 39% and 49% in 2020, respectively, as consumers shifted purchases online in more categories and in higher volumes. As consumer shopping behavior normalizes in the coming year, we anticipate some online sales, especially apparel and footwear, could revert to brick-and-mortar players. Still, we believe the accelerating shift online will continue to power Amazon's healthy long-term growth trajectory. The company also reported robust expansion in other higher-margin businesses such as advertising and subscription. Moreover, Amazon's industry-leading and highly profitable cloud business Amazon Web Services (AWS) continues...

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