Undoubtedly, you've heard quite a bit about FAANG stocks over the last few years. This acronym, which is a bit dated due to company name changes, stands for five companies: Meta, Amazon (AMZN -1.14%), Apple, Netflix, and Alphabet.

These companies have received a lot of attention because they've experienced fast revenue and profit growth, and their stock prices have risen by quite a bit over the previous decade.

While these companies have historically done well, it's important to focus on the future to see if that'll continue. As we close in on the first half of 2022, Amazon looks poised to reward shareholders handsomely.

A group of people packing boxes.

Image source: Getty Images.

Dominating data

Amazon Web Services (AWS), the company's cloud-computing service, has a dominant share of the market, with 32%. Better still, competition remains limited due to the business' high barriers to entry due to the need for expensive servers. The other major companies in the space are Microsoft's Azure (21% share) and Alphabet (9% share)

Last year, AWS's sales grew by better than 37% to $62.2 billion. It's a high-margin business, too. In 2021, its operating margin was 29.8%, well above the typical single-digit percentage generated by its North America and International operations.

This is a fast-growing business. That's because organizations continue to seek out utilizing data. Hence, AWS has put itself in a good position to continue growing sales and generating profits for a long period.

Online retail par excellence

There's also Amazon's venerable and popular online retail business. In just the U.S., fourth-quarter e-commerce retail sales grew by 9.4% compared to a year ago to $218.5 billion. This represented about 12.9% of total sales, down from 13.6% in the year-ago period, but that number was boosted by physical locations forced to shut down due to the pandemic.

This portion figures to grow as people become increasingly comfortable with technology. For instance, in China, e-commerce represented about 46% of sales, according to eMarketer.

The North American division's 2021 sales increased by 18.4% to $279.8 billion. Meanwhile, International's sales rose by 22.4% to $127.8 billion. Both businesses saw their profit fall, and in the case of International, reverse to a loss.

Management expects first-quarter operating income to fall from $8.9 billion to between $4 billion and $7 billion (excluding the effects of an accounting change). However, there are reasons for optimism.

Like many retailers, Amazon has been contending with higher costs and supply chain issues. It has taken steps to offset these, including raising the price of its popular Prime subscription. It now costs $139 annually instead of $119.

This shouldn't dent subscriber growth, though. The service provides fast delivery without an extra shipping charge. Prime also has a streaming service, and it recently purchased MGM to bolster content.

Additionally, while waiting for the retail operations to overcome these obstacles, Amazon has built an impressive advertising business. In the fourth quarter, ad revenue grew by 33% to $9.7 billion.

Amazon's stock has fallen by about 10% since the start of 2022, worse than the S&P 500's 7% drop. However, trading at a price-to-earnings ratio (P/E) of 46.25, that's much lower than in the past. For instance, a year ago the P/E was about 80.

Additionally, with the company's fast-growing, high-margin AWS business and emerging ad revenue, you can afford to be patient while waiting for its other businesses to perform better. Based on Amazon's track record, you won't have to wait too long.