We’re reiterating our rating on Amazon as shares fall in the after hours
On Thursday, Amazon gave better results for the second quarter than expected both in the upper and lower lines. However, a small income from the Amazon Web Services and Karma third quarter guide was not enough to impress investors and overturned the stock hours later. According to estimates compiled by LSEG, income increased to $ 167.7 billion and rose to $ 167.7 billion. The earnings per share on generally accepted accounting principles (GAAP) rose to $ 1.68 compared to the estimation of $ 1.26 and $ 1.33 per lseg last year. Business revenue increased by 31% compared to last year and increased the consensus estimation of $ 16.87 billion to $ 19.17 billion. As a result, the market will characterize several areas in the next few days, including questioning why AWS does not reversing the same kind of income as Microsoft Azure and Google Cloud. Criticism is fair, but we do not see it as a sign that AWS has lost in AI race. Although the company does not meet the expectations of guidance for business income, the management is known to provide a wide range of range and to overcome the first projections. Therefore, while the company reflects a quarter of a healthy income increase, we care to read the light appearance very in -depth. Most importantly, the thesis in Amazon has not changed. The drivers we look at to determine the long-term aspect of the stock is the increase in revenue from AWS and advertising-Two high margin revenue flow. Both were above expectations. Online stores are also important, but our focus is the ability of management to further reduce the cost of serving customers. If there are opportunities to reduce costs, these margins should continue to expand. And as we said before, if the margins are rising, the stock price follows. As a result, we see sales of Thursdays-the promissory notes fall more than 6% in post-working operations and give back their earnings from all year to day-as an opportunity to purchase. We repeat our degree and increase our price target from $ 240 to $ 250. Amzn 1y Mountain Amzn Cloud Unit Unit Amazon Web Services (AWS) 1 -year return comment revenue increased by 17.5% annually to $ 30.87 billion. A small stroke of about $ 91 million against consensus estimation. The growth rate was slightly faster than 16.9% in the first quarter. The opposite here was not as dazzling as Microsoft Azure reported on Wednesday and caused some disappointment. The management once again, a multi -year -old multi -dollar -dollar -dollar -dollar -year -long -term business, re -confirmed as AI Bulut, said it was enough supply to keep up with the demand. Amazon CEO Andy Jassy, in his call with investors after earnings, drew attention to various fields of supply restrictions, but now the biggest challenge is access to power. This helps to explain that the shares of GE Vernova, one of the world’s largest gas turbines manufacturers, double this year. Other restriction areas are chips and components to make servers. Jassy reiterates what Microsoft said on Wednesday, and said it would take a few quarters to solve these problems. AWS finished the quarter with a accumulated accumulation of $ 195 billion. This increased by 25% from year to year and about 6 billion dollars from the first quarter. However, margins from the cloud computing segment were also disappointed. After approaching 40% in the first quarter, the business margin returned to Earth and settled at 32.9% in the second quarter. This fell both from the estimation of consensus and the result of last year’s 35.5%. The company took a seasonal step in stock -based compensation costs, higher depreciation expenses and FX ratios as the reasons for margin decrease compared to last year. For the rest of the company’s business segments, the board of directors would come throughout the board. Some of the important performances were in online stores with their forecasts for 2.5 billion dollars, third -party seller services and high -margin advertising services. Jassy has reduced some of the latest reports indicating that prices have increased on the e-commerce platform due to explanations. “It continues to be too much noise about retail prices and the impact of tariffs on consumption. Most of them have been wrong and wrong.” He said. “As we said before, it is impossible to know what will happen.” “But what we have seen so far is what we have seen, that is, in the first half of the year, we have not seen that it has been significantly appreciated by the decreasing demand or prices.” Why do we have Amazon: Amazon may be widely known for online shopping, but cloud work is real bread winning. Advertising is another fast growing business with high margins. The investment in the solid e-commerce logistics infrastructure makes the online store such as management work to reduce management times aggressively and reduce total costs. Prime uses free shipping and video stream with tons of other advantage to allow users to pay each month. Competitors: Walmart, Target, Microsoft and Alphabet The latest Buy: 15 April 2025 launched: February 2018 and North American sales increased by 11% and business margins rose from last year to 7.5%. In the international segment, Amazon’s income increased by 16%, but thanks to a significant increase in business margins, operating income increased, which exceeded 4% and a new company record. For both regions, margins rose from the first quarter as they continued to reduce the cost of serving e-commerce customers. Amazon also benefited from Deepfleet, a recently distributed AI model, a AI model that manages the movement of robotics. Jassy said Deepfleet helps robots to travel more efficiently and turned into faster delivery times and lower costs for customers. On the capital expenditure side, Amazon invested approximately 31.4 billion dollars in the second quarter, which increased by about 5 billion dollars more than expected and $ 24.3 billion in the first quarter. The management expects the second quarter Capex to represent a three -month capital investment rate for the second half of the year, and implies that Capex is about $ 117 billion for full year. This is an increase in management’s plan to invest $ 100 billion this year. The primary driving force of these investments will go to AWS to support the demand for AI services, but Amazon also invests in the transport and transportation network. Bulut Bilişim “Hyperscalers “‘s earnings are now completed, once again, all major players spend more than expected and have planned to invest more aggressively in the next neighborhoods. Guidance Amazon’s third quarter guidance was better than expected in sales, but missed business revenue. The company expects net sales to increase the annual increase of 10% to 13% to $ 174 billion. This appearance is far above $ 173.27 billion consensus estimation. Online sales are expected to increase in the third quarter in the second quarter, and one reason is expected to be a reason for the successful four -day premium -day shopping event held in early July. Jassy, records for sales, the number of products sold and the number of registrations in weeks to longer event determined the number of main records, he said. However, the third quarter operating revenue is expected to take place between 15.5 billion and 20.5 billion dollars, which keeps the street consensus forecast at a midpoint of $ 18 billion. Guidance is always important, but historical context is also important. The company has inadequate and exaggeration history. Here is a good example of what we mean: Three months ago, the Amazon administration said that the second quarter revenues expected between 159 billion to 164 billion dollars, which has been proven to be very conservative since Amazon reported sales of $ 167.7 billion. The same applies to business income. In the last quarter, the company guided $ 13 billion and $ 17.5 billion, and Amazon was only published $ 19.17 billion. Amazon will not overcome the highest end of a appearance in every quarter, but we get some comfort that the upper end of the third quarter appearance is above the prediction of consensus. (Jim Cramer’s philanthropist trust is for a long time. Look here for the full list of stocks.) By subscribing to Jim Cramc and CNBC Investment Club, you will receive a trade warning before Jim made a trade. Jim is waiting for 45 minutes after sending a trade warning before buying or selling a share in the portfolio of charitable confidence. If Jim talked about a stock on CNBC TV, he’s waiting for 72 hours after trading warning before trading. The above investment club information is subject to our conditions and conditions and our Privacy Policy with the waiver. There is no confidence or duty or not, as you receive any information provided in connection with the Investment Club. A specific result or profit is not guaranteed.
