Amazon’s Margin Growth May Have to Take a Breather

The timing of several elements of Amazon’s forward guidance are conspiring to slow the upward trajectory of its margin expansion, Benchmark analyst Daniel Kurnos says in a research note. Management has pointed out several near-term headwinds, including a drop in the useful-life estimate tailwinds for AWS servers, an investment in the buildout of AWS, and incremental investments in a subsidiary’s Project Kuiper mission to get thousands of satellites off the ground in 4Q, the analyst says. The resulting downward margin pressure in the next couple quarters may blunt some prior momentum and put a sharper focus on revenu at a time when the macro environment looks unstable, Kurnos says. Shares slide 10% to $165.63.

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