4 ‘key’ reasons Amazon will recover from AWS outage

00:00 Josh

I want to switch gears here, Dan, I want to get your take on another name and another story today, and that’s Amazon’s situation with the AWS outage. I’m curious what you make of this and the investors’ reaction, Dan. So investors weren’t worried today, Dan. They seem to shrug it off. Amazon actually gained 1.6% here. What do you make of the story? What do you think about the investor reaction?

00:23 From

The outage does not change our view on the stock and the company’s long-term outlook. This is because outages occur in AWS. This happened on other cloud platforms as well. What really matters is whether a platform like AWS can recover; I believe they will continue to invest very quickly, create value for their users, and truly unleash a whole new wave of innovation in important areas like generative AI. That’s what I think we’ll see in the next 12 to 24 months. AWS’s capacity is limited like some other clouds, but when I step back and talk to customers, the direction is clear given the innovation, aggressive level of investments and others that are truly empowering developers and organizations to succeed on the AWS platform. And I and I hope to see a lot more of this next year.

01:17 Josh

Yeah, hurry up Dan, switch to stocks. So listen, it’s been a good move in the last six months, but it hasn’t been a great year for Amazon. What do you think is the problem there? And obviously you’re confident about that, do you think it’s going to change the narrative?

01:32 From

The problem is that Amazon is the largest cloud, with over $100 billion in revenue, and so its growth rates in the high teens are slower than Microsoft and Azure on the smaller Google Cloud platform. Both of these platforms are performing well and critically this market, this cloud market is growing at healthy double digits. Therefore, the market is worried that Amazon will lose its share to other players. What we see is a very resilient double-digit growth platform, healthy margins, aggressive investment and innovation levels. My view is that if Amazon can grow later in life or get a little better from time to time, it can create a lot of value for customers and shareholders. But that’s a very short-term concern, Josh. I think they have laid the foundation for continued strong growth over the next 12 to 18 months.

02:18 Josh

Dan, it’s always nice to see you. Thank you.

02:21 From

Thanks.