Amazon, which started as an online bookseller 30 years ago, has grown into a massive enterprise with annual sales reaching approximately $575 billion last year.

The company has diversified its offerings significantly, now including services like Amazon Prime and Amazon Web Services (AWS), which is crucial to its profitability.

In the last quarter, AWS accounted for 89% of Amazon's operating profit, showcasing its vital role in the company's financial health.

AWS's operating income surged from $5.4 billion to $9.3 billion, achieving an impressive operating margin of 36.5%.

Amazon's growth strategy, known as 'Day 1,' emphasizes continuous innovation and adaptation, aligning well with current trends in artificial intelligence.

Over the past 18 months, AWS has launched more machine learning and generative AI features than all other major cloud providers combined.

Despite its strong fundamentals, Amazon's stock price dropped nearly 10% following a second-quarter earnings report that slightly missed revenue expectations.

This recent decline has brought Amazon's stock to near its lowest valuation in a decade, creating a potential buying opportunity for investors.

Cathie Wood has been actively purchasing Amazon shares, acquiring stock on all five trading days last week across six of Ark Invest's eight ETFs.

With a current price-to-earnings (P/E) ratio of 39, Amazon reflects high market expectations for future growth compared to the S&P 500's 27.

Investors who held Amazon shares for a decade have seen their investment increase by nearly 1,000%, significantly outperforming the S&P 500's 227% return.

To manage risks associated with high valuations, dollar-cost averaging is recommended for purchasing Amazon shares over time.