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Oct 272023

AMZN: Amazon Stock Jumps 5.4% as Profits Triple to $10B on AI-Driven Sales in Cloud

The software giant beat on both revenue and net income guidance as demand for AI-enabling services soared.

  • Amazon stock (ticker: AMZN) is looking to open 5.4% to the upside Friday after the company posted a whopping quarterly profit. For the three months to September, the software powerhouse notched $9.9bn in profits, more than triple from a year ago, and eclipsed expectations of $6.05bn.
  • Translated to earnings per share, Amazon scooped up 94 cents a share, comfortably above the Wall Street consensus call of 58 cents. Revenue for the quarter came in at $143bn, a 13% increase, beating analysts’ $141.5bn forecast. Fourth-quarter guidance now sits at $160bn to $167bn in sales.
  • Strong sales in Amazon’s cloud-computing, Amazon Web Services, or AWS, boosted both the top and bottom line, sales and profit. Chief executive Andy Jassy noted that AWS revenue rose 12% to $23.1bn on elevated business demand for the company’s AI platform, named Bedrock.
Illustration by TradingView
Sep 262023

AMZN: Amazon Joins AI Race with $4B Injection into OpenAI Rival Anthropic

In a catch-up play, Amazon is backing a company that has launched a competing product to the ChatGPT juggernaut. Who’s who in the race?

  • Amazon is joining the AI race with a minority stake in Anthropic, a company that in 2021 unveiled Claude – a rival platform to the ChatGPT juggernaut, owned by OpenAI. And while OpenAI is backed by Microsoft with a $10B investment, Amazon is plowing $4B into Anthropic. Amazon stock (ticker: AMZN) rose 1.7% on the news.
  • Through the investment, Amazon’s cloud clients will get early access to Claude. Vice versa, the platform will use Amazon Web Services’ native chips to build out its AI software. More recently, Anthropic released its Claude 2 AI assistant, saying the bot is great at working out content on complex topics.
  • The AI boom is getting traction after a fairly quiet summer. With Amazon now breathing down Microsoft’s neck, and Google struggling to take its Bard bot off the ground, the race to the top is shaping up to be a competition between Big Tech giants, fighting with each other.
Illustration by TradingView
Sep 252023

AMZN: Amazon Prime Video to Start Showing Ads in Early 2024. Stock Stays Muted.

The online giant’s shares have gained 50% this year, pushing the company to a valuation of a hefty $1.3tn. But still some 30% below record high.

  • Amazon Prime Video will start serving ads in early 2024, the Jeff Bezos-founded company said Friday. Analysts expect the existing subscription tier of $14.99 in the US to be converted to an ad-supported tier. The ad-free experience will run users an additional $2.99 a month. Amazon stock (ticker: AMZN) didn’t flinch as shares floated sideways.
  • The first countries to make the change, outside of the US, will be the UK, Germany, and Canada. Pricing for them will be determined at a later stage. But by the looks of it, before the new season of ‘Rings of Power’ sees daylight, all major markets are likely to be affected by the sweeping update.
  • So why the ads? It’s a bold bet of Amazon to diversify its Prime Video revenue streams. The service is presently buoyed by the monthly fee paid by roughly 200 million Prime subscribers. In comparison, rival Netflix’s ad tier comes at $6.99 a month and Disney+ charges $7.99 for the ad-backed package. Still, Prime comes with a lot of extra services.
Thibault Penin / Unsplash
Jun 222023

AMZN: Amazon Sued by US Federal Trade Commission

  • Amazon has been hit with a lawsuit by the FTC for making it too difficult for users to cancel their Prime subscriptions.
  • Amazon made $9.66bn in subscription revenue in its most recently reported quarter, which mostly came from Prime.
  • Prime has also seen slowing subscriber growth since prices were increased.

Amazon has just been hit with a lawsuit by the Federal Trade Commission (FTC) for allegedly hindering customer efforts to cancel their Amazon Prime subscriptions. In the lawsuit, the regulatory body claimed that there is a purposefully high number of steps involved in canceling a subscription, and the button to begin the process is deliberately difficult to locate. The lawsuit alleges that there are 5 different pages on the website that must be navigated to cancel.

Recently, US regulators have been applying security to how easy it is for users to cancel subscription services, with a new rule being proposed which would make it necessary for canceling to involve as few steps and signing up. Amazon’s subscription service revenue was $9.66bn for the quarter ended March 31st this year – which was primarily generated through Prime subscriptions. Although in recent years, sign-ups to Prime have been hitting a period of slowed growth – after the company increased its cost.

(About Amazon)
Amazon is a multinational technology company that is renowned for its vast online marketplace and a wide range of products and services. Founded by Jeff Bezos in 1994, Amazon started as an online bookstore but rapidly expanded to include various goods such as electronics, clothing, home essentials, and more. Apart from its e-commerce dominance, Amazon has expanded into various sectors and diversified its offerings. One of its notable ventures is Amazon Web Services (AWS), a cloud computing platform that provides a broad range of services to businesses and individuals. AWS has become a leading player in the cloud industry, offering scalable infrastructure, storage, artificial intelligence, machine learning, and other advanced solutions.
Illustration by TradingView
May 262023

AMZN: Amazon Gets Left Out as AI-Powered Tech Stocks Lift Off, Shares Fall 1.5%

Generative AI generated a massive surge in cloud and artificial intelligence plays. Why was Amazon the outlier?

  • Amazon stock (ticker: AMZN) was the only large-cap tech firm to be left behind in a powerful AI-driven buying spree on Thursday. In the aftermath of Nvidia posting a blowout financial report, the world’s largest cloud computing services provider by market share couldn’t take off and shares slipped 1.5% on the day.
  • What’s the reason for Amazon to get knocked while tech stocks, and cloud and AI-enabling firms in particular, rallied hard? Big tech companies such as Google parent Alphabet, Microsoft, and Oracle have solid partnerships with Nvidia and are generally more inclined to supply hardware pieces from the chipmaker.
  • Amazon, on the other hand, has opted to break out of that trend and is manufacturing its AI chips in-house. Strange as it may sound, the biggest cloud player out there was left out of a stocks-going-nuts-over-AI rally that nearly propelled Nvidia to the $1T club.
Yender Gonzalez / Unsplash
Apr 282023

AMZN: Amazon Stock Erases 12% Off-Hours Gain as Cloud Outlook Turns Dim

The tech giant picked up $3.2bn in profits, up from a $3.8bn loss a year ago, largely thanks to its cost cuts and layoffs.

  • Amazon enjoyed a growth surge in the first-quarter as it swung to a profit of $3.2bn on revenue of $127.4bn. The figures eclipsed the tech firm’s year-ago loss of $3.8bn and net sales of $116.4bn. Despite the uplifting performance, Amazon disappointed with its forward-looking guidance.
  • Moments after the report’s release, the stock rallied as much as 12%, adding more than $120bn to its projected market cap. Easy come, easy go – in a post-earnings call, Amazon warned of a growth slowdown in its cloud computing unit. The lofty gains fizzled to an implied loss of 2% at the opening bell today.
  • How important is the cloud? Amazon’s cloud division, AWS, has long been the company’s profit center. Its revenue growth for the quarter came in at 16% from the year prior to $21.4bn. In April, however, sales slipped to 11% as cloud businesses tightened belts amid a softening economy.
ANIRUDH / Unsplash
Mar 212023

AMZN: Amazon Prepares for Second Round of Layoffs Amid Recession Fears

  • Amazon has announced another 9k layoffs in its second round of layoffs in just months.
  • This time the cuts will focus on the company’s cloud and advertising units.
  • The move could signal another impending wave of layoffs for the tech industry.

Big tech is facing a problem at the moment. Over the pandemic, companies in the space went on a mass hiring spree. And now that covid is behind us for the most part, the same companies are struggling to remain profitable in the face of an impending recession – and layoffs seemed the most obvious choice in terms of trimming the cost of their operations. Now however, it’s looking like one round of layoffs wasn’t enough for some.

Amazon doubles down

Online-retail giant has announced yet another round of layoffs which will see an additional 9,000 employees let go from the company. The company already announced mass staff-cuts in November, although this time the cuts will have a specific focus on the company’s cloud and advertising units – some of its most profitable divisions. This brings Amazon’s total layoffs to 27,000 employees over the course of just a few months. The news might come as less of a surprise given that Amazon’s share price is down by 38% YoY and its profit margins have been hovering around 0% for several quarters.

Round Two

Amazon is far from the only company buckling up for what might become a recession this year. Meta, Google and Microsoft are all using the same approach as Amazon to make their companies more lean amid economic uncertainty. Just last week, Meta announced its second round of layoffs, which will involve an additional 10,000 staff being let go. Amazon CEO Andy Jassy says that he remains “optimistic”, although there doesn’t seem to be much cause for optimism in the markets at the moment.
JD Lasica / Wikimedia Commons
Dec 072022

Laying down the law

The EU regulator’s case against Amazon may have reached a conclusion, and the implications for the industry could be widespread.

  • Antitrust regulators in the EU may have finally reached a deal with Amazon, more than three years after opening a probe into the company for anti-competitive practices. The tech giant has agreed to give rival products more visibility on the website, and merchants using Amazon Prime will no longer be forced to use Amazon logistics.
  • It’s a victory for the EU regulator and it’s a pretty big deal for the industry. It shows that regulators are serious about the Digital Markets Act which it adopted in September, and tech giants will have to obey the new rules or risk fines of up to 10% of their global revenue. An Amazon representative however said that the company had been “unfairly targeted.”
  • 2022 has been a year to forget for Amazon. Aside from a bleak Q4 outlook and having to let go of over 10,000 employees, shares in the FAANG stock have dropped by around 48% since the start of the year. Sales in its Amazon Web Services division have also been coming in short this year – perhaps 2023 will bring the company some welcome relief?
Hello I'm Nik/ Unsplash
Nov 152022

A storm brewing

Amazon plans a layoff of mass proportions just as its founder gears up for a giveaway of mass proportions. Go big or go home, as they say.

  • Amazon has plans to axe around 10k employees in the biggest mass layoff in company history – it represents about 1% of Amazon’s workforce, including 3% of its corporate employees. The e-commerce giant joins other tech firms like Meta and Twitter, who laid off a huge percentage of employees to cut costs.
  • It means the holiday season could be filled with drear instead of cheer for retailers. The December quarter is historically a great month for not only Amazon but retailers at large cause of all that present buying – but this quarter it looks like the inflation grinch will be grinning at his stolen gains, especially with Amazon down nearly 3% on the news already.
  • Daddy Bezos is giving a Christmas gift of his own this year, though it came with a rather glum card. The billionaire CEO said on Monday that during his lifetime he plans to give away a majority of his $124bn wealth. That’s great. But he also once again warned consumers to significantly reduce their risk because “if we’re not in a recession right now, we’re likely to be in one very soon”.
Daniel Oberhaus / Flickr
Nov 042022

The other endangered Amazon

Tech giant Amazon has added to its woes with a disappointing Q4 forecast leaving a sour taste in investors’ mouths.

  • Amazon has dipped below a $1tn valuation with its share price dropping by more than 6% since Wednesday. The company’s pandemic gains have been largely erased and its share price closed on Tuesday at its lowest level since April 2020.
  • Some of the sell-off is being driven by a pessimistic Q4 forecast with growth over the holiday period expected to be only 2%-8% which is significantly below analyst predictions. Its Amazon Web Services division also disappointed with sales missing on estimates last quarter.
  • The tech giant’s been making efforts to reduce its costs to weather economic conditions, but is still the second-worst performing of the tech ‘Big Five’. Most hiring has now been paused after jobs cuts already took place earlier this year – driven by shoppers returning to in-person stores as lockdowns eased.
Illustration by TradingView
Oct 282022

A fall from grace

Looks like this year, Amazon investors might be getting something worse than coal for Christmas: nothing at all. As you can imagine, shares are pretty crushed about it.

  • Amazon saw its shares drop a whopping 13% in extended trading on Thursday on top of a 4% intraday loss, taking its YTD losses to over 42%. An earnings miss was behind the dramatic decline, with the e-commerce giant reporting EPS of $0.28 on revenues of $127.1bn – that number was up 15% YoY, making a return to double-digit sales growth, but still missed.
  • Amazon Web Services, its cloud service, was a sore spot. While the unit and its operating income of $5.4bn was responsible for all of the company’s profit, revenue growth was its slowest since 2014. Its advertising business, however, surged 25% in stark comparison to the ad revenue disasters reported by many of its peers recently.
  • A gloomy holiday quarter outlook was the real clincher here, coming despite a slew of cost-cutting efforts. With expenses rising quicker than revenues, a strong dollar, and a weak macro environment, Amazon said it could just break even in Q4 when analysts expected $5bn+ in operating profit – projected revenue growth of between 2% and 8% was the slowest in the company’s history.
See all reported financials
Jul 292022

Amazon bucks the retail trend

We’ve heard a lot of bad news from big tech this week, but Amazon is here to turn those investors’ frowns upside down.

  • Amazon shares were up as much as 14% in extended trading on Thursday, after the e-commerce giant reported a mixed bag of earnings that missed on the bottom end with LPS of $0.20 – partly bc of a $3.7bn loss associated with its Rivian stake – but solid revenue bucked the trend of its peers with growth of 7% (still its slowest in 20 years) to beat estimates at $121.23bn.
  • Its cloud business and other key segments beat estimates too. Ad revenue climbed 18% to $8.76bn and AWS revenue jumped 33% to $19.7bn – and it did all that while dealing with higher costs in fuel and energy, inflation, too many employees and too much warehouse space. All of these are impressive in light of recent comments from competitors, but worth noting its retail segment wasn’t as profitable.
  • Rosy guidance helped boost the stock. Execs said that consumer confidence remains strong despite inflationary pressures, a starkly different opinion to that given by competitors Walmart and Best Buy earlier this week. Amazon expects sales of up to $130bn for the current quarter, representing growth of up to 17%, again bucking a trend of gloomy guidance across retail.
See all reported financials
ANIRUDH / Unsplash
Jul 222022

Amazon’s healthcare push

Is Prime Medical on the way? Amazon’s been pushing into healthcare for some time now and it’s just turned things up a notch with a new acquisition.

  • Amazon is buying One Medical for $3.9bn. It’s a company that boasts an offering of “user-friendly” primary care facilities and a robust remote medical practice, and is Amazon’s latest attempt to become a leader in the lucrative healthcare industry after launching Amazon Care three years ago. Vaccine with your delivery, anyone?
  • It’s sure to give regulators a few gray hairs, especially given the medical sector handles such sensitive data. Government agencies get more vocal about Amazon’s growing power in the market, especially as the platform focuses on growing its empire into other industries.
  • Speaking of which, Amazon is upping its electrification game too. The company continues to make a push towards net-zero carbon emissions by 2040, and has now started rolling out some of the electric delivery vans it’s been developing with Rivian since 2019 – it still wants to buy 100k of the vans going forward, though there remains some doubt about whether Rivian can deliver.
Christina Victoria Craft / Unsplash
May 232022

Amazon flexes its muscles once more

The retail giant is set to trial mall-based deliveries, marking another feather in its multi-talented cap.

  • How many fingers does Jeff Bezos have in pies? Many. In fact, he may have his finger in your locally bought goods now (a sorry but quite real image), given Amazon is now seeing whether its Flex drivers can deliver mall-bought goods to consumers.
  • Amazon pinged Flex drivers in the last month letting them know of an upcoming opportunity to retrieve packages from retailers in their area and drop them off at customers’ doorsteps. Initially, this test will be limited to Arizona, Nevada, and Virginia.
  • With 3m Flex drivers in the US, peeps certainly won’t be short of delivery options. The move by Amazon is another push into widening its array of products available to be delivered. Soon, perhaps, users will be able to buy twelve different kinds of pie-making kits. ‘Cos capitalism.
Apr 292022

Amazon’s ample losses

Sales are down and inflation is up, all of which prove just slightly too much pressure for big tech behemoth Amazon.

  • Amazon sank by as much as 12.7% in extended trading on Thursday after reporting a mixed Q1, widely missing on the bottom with EPS of $7.56, but beating marginally on the top end with revenues that were up 7% at $116.4bn – still, this marks Amazon’s slowest growth since 2001 and its second straight quarter of single digit growth.
  • Inflation and higher wages were at fault for the disappointing numbers, according to Amazon anyway, and meant that its costs jumped by 5% of sales, or $3m every single hour. Yikes. The brand has also seen a dramatic drop in online sales, which were down nearly 4% from last year at $51.1bn. On the plus side though, its cloud biz is booming.
  • Guidance left investors feeling on edge, worsened by the declining value of Amazon’s Rivian stake. Despite trying to offset rising costs by upping the price of Prime and adding a 5% surcharge for some US sellers, Q2 is forecast for revenue growth of around 3 to 7%, missing estimates. Seems like nobody is safe from the current market mayhem.
Ussama Azam / Unsplash
Apr 212022

Amazon competes with OG delivery giants

Amazon wants to upgrade from e-commerce giant to delivery giant with its new third-party shipping feature.

  • Amazon will let its Prime customers use its vast shipping network and fulfillment centers for third-party products and orders through the new “Buy with Prime” feature.
  • It wants to compete with the big dog delivery services like UPS, FedEx, and even the US postal service. The company said last year that it wants to be the largest delivery service in the US by 2022, and this will likely help it get there.
  • Third-party selling already brings in the moola for Amazon, seeing revenues jump 11% to $30.3bn in its latest quarter. Amazon seems to be making a habit of turning internal tools and infrastructure into a cash machine – that’s how AWS started after all.
Apr 182022

Some costs Amazon won’t swallow

It takes a pandemic, global inflation, and a war for Amazon CEO Andy Jassy to admit that price-hikes are coming to the platform. But who picks up the tab? Third party sellers, apparently.

  • Amazon is introducing a 5% fuel and inflation surcharge to ease the pain of all the recent geopolitical and economic events. This will be introduced from April 28th onwards, and applies to US third party sellers.
  • The decision will force merchants to pay for storage of their inventory and the use of Amazon’s supply chain. The judgement applies across all product types, most likely making some second-hand booksellers very nervous indeed.
  • Fulfillment By Amazon (FBA) fees were previously raised by 10.6% on January 18. Last year saw them make $103bn in seller fees, representing 22% of overall revenue.
JD Lasica / Wikimedia Commons
Apr 062022

Amazon plans space deliveries

Amazon’s internet beaming satellite project, Project Kuiper, takes one giant leap towards its mission to space.

  • Amazon just announced the biggest rocket deal in commercial space history, detailing deals with three major rocket launch companies – Bezos’s Blue Origin (duh), EU-based Arianespace, and United Launch Alliance. So basically all the big ones except SpaceX.
  • The contracts include 83 satellite launches that will take place over the next five or so years, and will cost Amazon “billions” of dollars. If all goes to plan, the e-commerce giant will have released the bulk of its first 3,236 satellites by 2026.
  • There’s a new space race afoot. After the billionaires of the world raced to be the first in space, they’re now racing to provide global internet first. Amazon’s efforts are largely to keep up with Elon Musk’s SpaceX Starlink program, which is way ahead and already boasts 2,000 satellites in orbit, with plans for tens of thousands more.
Mar 182022

I am Amazon, hear me roar

Movie studio MGM has officially joined the Amazon family after the e-commerce giant passed its antitrust tests with flying colors.

🔍 Key points:

  • Amazon got the green light from US competition regulators on Thursday to complete its $8.45bn purchase of iconic movie studio MGM, despite growing concerns about the online giant’s size and power. It comes nearly a year after the deal was first announced.
  • This is Amazon’s biggest ever purchase in the media industry, and its biggest deal of any kind since it bought Whole Foods for $13.7bn in 2017. There is still a chance that regulators will block the move after a 30-day review period, but only time will tell.
  • MGM has got a treasure trove of iconic films to its name, so its library will provide a huge boost to Amazon Prime, as well as help it gain ground on competitors like HBO Max, Netflix, and Disney.
Bradford Timeline / Flicker
Mar 162022

Let me play the lion too

Amazon gets given the green light from the EU for its bid to take over as the king of the streaming jungle.

🔍 Key points:

  • The EU has said Amazon can go ahead with its MGM purchase. The e-commerce giant has got unconditional EU antitrust approval for its $8.5bn acquisition of iconic movie studio MGM, which brought the famous Leo the Lion roaring to our screens.
  • It’s a big deal for Amazon because massive mergers like this often pose a threat to competition in the industry. But, just because the EU doesn’t think it’s a problem doesn’t mean the US will agree – the FTC and its new strict head Lisa Khan still has to weigh in, and that could go either way.
  • Elsewhere, Amazon is using the metaverse to help AWS users. The platform launched an online role-playing game that aims to help people learn cloud-computing skills that they can use on Amazon’s cloud network. It’s a brave new world.
Håkan Dahlström / Flicker