Amazon

Amazon.com stock approaches an all-time high after the company reported Amazon Web Services growth reaccelerating and a rebound in retail spending following some deceleration last quarter, Davidson analysts Gil Luria and Alex Platt say in a research note. The company’s commentary around AWS suggests that AI features are gaining considerable traction with customers, the analysts say. Management also suggests that AWS core services growth is healthy from new workloads and cloud migration initiatives, they say. Efforts to improve profitability on both the retail side and AWS are boosting the company’s operating margins, the analysts say. Shares rise 7.3% to $200, $1.20 from their all-time high.

Amazon Web Services is now the top dog among cloud providers for AI, Davidson analysts Gil Luria and Alex Platt say in a research note. Amazon.com has taken several steps to get products and features in line with those of its hyperscaler peers in AI, especially Microsoft Azure, they say. The Amazon cloud division now has a broad set of product offerings for generative AI-specific workloads, and sees strong adoption of AI features like Amazon Q or Bedrock, the analysts say. In 3Q, AWS took in almost twice as many total dollars quarter-to-quarter as Azure, with growth accelerating to 19%, they say.

Amazon is funding considerable increases in its capital expenditures with an even larger step-up in operating profit gleaned from tight cost controls, UBS analysts say in a research note. The company is controlling its headcount to keep operating expense growth low and expand margins, they say. The company’s capex jumped 80% to about $23 billion in 3Q as Amazon Web Services invests aggressively in AI infrastructure to meet high demand, Davidson analysts say in a research note. But Amazon’s cloud unit has a lot of price efficiencies in its chips that are less expensive to implement, they say.

Amazon sinks 10% after mixed 2Q results, lower North American segment margin and modestly weaker-than-expected advertising growth, but Wedbush analysts say they’d be buyers. The long-term thesis of the company is unchanged, they say. Amazon’s revenue mix is shifting toward higher-margin Amazon Web Services and advertising is structural and should contribute billions of dollars to incremental profit each year, the analysts say. That shift in business mix should combine with ongoing cost efficiencies in the core retail business to sustain operating margin expansion, they say.

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.

Amazon.com (AMZN) reported “mixed” Q2 results versus higher expectations as retail margins failed to exceed by as much as expected, advertising growth slowed, the Amazon Web Services backlog declined and the revenue outlook for retail was “soft,” BofA Securities said in a note Friday. For Q2, the company reported revenue slightly below expectations. Retail revenues fell short due to lower sales per unit, but margins were better than expected due to improved efficiency. Amazon Web Services growth was 19%, surpassing the 17% forecast, and AWS earned $9.3 billion in profit with a 36% margin, higher than the 32% estimate, the analysts said. The midpoint of the company’s Q3 revenue forecast is $154 billion to 158.5 billion, however, Amazon typically exceeds its guidance, so if profits hit the high end of the range, it will grow quarter-over-quarter despite margin pressure from Prime Day and added retail capacity, which is a positive

Amazon.com (AMZN) is working on an AI chatbot codenamed “Metis” to compete with ChatGPT, Business Insider reported Monday, citing people familiar with the matter and an internal document it obtained. Metis uses retrieval-augmented generation to automate tasks and provide up-to-date information, the report said.

Amazon.com (AMZN) continues to be one of the few large-cap companies thriving from the public’s shift to ecommerce, with the company succeeding on multiple fronts, including its Prime Video unit, Oppenheimer said in a note emailed Wednesday. Following the launch last year of an ad-supported tier for Prime Video, Amazon this week hosted an Upfront presentation for the first time to attract advertisers to its movie and TV content. The event had plenty of “star power ” to get advertisers’ attention – including projects led by Jake Gyllenhaal, Will Ferrell and Reese Witherspoon – although the Oppenheimer analysts said the Upfronts traditionally have focused on selling ad space for TV series rather than movies. Oppenheimer also said that bringing on top-shelf talent for its movies and television shows is expensive and that spending will likely pay off with increased viewership. Sports similarly will attract viewers over time as Prime secures

Amazon.com reports Q1s earnings after the bell. Analysts polled by FactSet predict sales rose 12% to $142.65 billion, which would be up from the 9% sales growth Amazon saw a year ago and a Q1 record for the company. Analysts expect Amazon made $8.95 billion in profit from April to June, up from $3.17 billion in the same period a year earlier. Amazon CEO Andy Jassy has significantly reoriented the company to focus on artificial-intelligence innovations. Earlier this month, in his annual letter to shareholders, he said generative AI may be the largest technology transformation since the cloud and perhaps since the Internet. But he also said Amazon remains committed to cost-cutting.

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: Our 12-month target of $233, up $12, is calculated using an EV/EBITDA multiple of 17x from our 2024 adj-EBITDA estimate of $150.0 billion (up from $141.8 billion) vs. 12x-30x historical average. We lift our 2024 adj-EPS (excludes Rivian valuation and stock-based comp) to $7.47 from $6.85 and 2025’s to $8.75 from $8.53. Q1 revenue of $143.3 billion (+12.5% Y/Y) beat by $764 million, with operating income of $15.3 billion (+221% Y/Y), $4.3 billion or 39% above consensus. AWS grew a staggering 17% Y/Y and is now a $100 billion run-rate business, of which AI represents just a few billion dollars today. Advertising grew a solid 24% Y/Y. We wouldn’t look too much into the cautious Q2 guidance, as AMZN is notorious for conservative guidance. We’re also not

The following is a summary of the Amazon.com, Inc. (AMZN) Q1 2024 Earnings Call Transcript: Financial Performance: Amazon reported Q1 2024 revenue of $143.3 billion, a 13% increase year-over-year, excluding impacts from foreign exchange rates. Operating income was $15.3 billion, a 221% increase from the prior year. The company reported a trailing 12-month free cash flow, adjusted for equipment finance leases, of $48.8 billion, which is an increase of $53.2 billion year-over-year. Advertising sales saw a year-over-year increase of 24%. The AWS segment recorded a revenue growth of 17.2% YoY, reaching an annualized run rate of $100 billion. Business Progress: Amazon is expanding their product selection and has launched an AI tool for making product listing easier for sellers. Nearly 60% of Prime orders were delivered on the same or following day in Q1, and the company is working to improve delivery speed further. Fulfillment efficiency is being optimized by

By Dan Gallagher Big tech is having a spending party this year, and the biggest tech of all won’t be sitting it out. It helps that Amazon.com’s investors have been there before. The sector’s sales leader posted strong first-quarter results on Tuesday afternoon. Revenue growth beat Wall Street’s targets across nearly all of the company’s segments, while operating income more than tripled year over year to a new high of $15.3 billion, beating analyst estimates by 36%. That put Amazon’s operating margin above 10% for the first time in the company’s history, according to data from S&P Global Market Intelligence. Investors weren’t fazed by Amazon’s projection for revenue and earnings growth in the second quarter being a bit below Wall Street’s projections. That has become commonplace for a company known to issue conservative forecasts; Amazon’s operating income projection has been below analysts’ consensus forecasts for nine of the past 12