Research archive for AMZN

There's been a lot of hype around the split of Alibaba into 6 separate entities. Sadly it looks like this was a forced move to please Chinese regulators. Since its US listing in 2014, Alibaba has returned just 9%. The Amazon of China had so much potential, but Xi Jinping took a personal dislike to Alibaba chief Jack Ma.

There are rumours that Amazon is exploring a purchase of ailing cinema company AMC. Earlier in the week, the AMC share price was up 21% over two days in anticipation of an offer.

We already know that Nvidia, Microsoft and Google have big exposure to AI (Artificial Intelligence). As it turns out, Amazon may also be a sleeping giant in this area of fast growth. In a recent conference hosted by AWS, Amazon highlighted how their cloud services can help businesses become more efficient through AI learning.

Amazon has another stake in an electric vehicle company, in addition to Rivian. In 2020 Amazon paid $1.3 billion for Zoox, an EV self-driving taxi producer. Zoox is unique in the self-driving car world because they have built their taxi from the ground up, instead of retrofitting an existing vehicle with self-driving technology.

Last week my favourite chartist Charlie Bilello pointed out that Amazon Web Services' 2022 revenue, although showing disappointing growth, was higher than 457 companies in the S&P 500. He also mentions that AWS has grown sales at 44% per annum for last 9 years, from $3 billion to $80 billion. That's just phenomenal.

Last week, Amazon reported its first unprofitable year since 2014, losing $2.7 billion despite good holiday-season sales. The company's share price dropped by 8.4% on the day.

Amazon was another big-tech company to report earnings last week. Unfortunately, its results weren't as well received as Apple's. Like Microsoft, the market was disappointed by the growth of the cloud computing division. Of Amazon's $1 trillion valuation, about 80-90% is ascribed to AWS, and the balance to the better-known online store.

Last Thursday, Amazon released fantastic results which blew away expectations. This is what we like to see! The share price surged 10%, taking the whole Nasdaq higher on Friday. Heading into the release many analysts were worried about rising costs and slowing e-commerce sales, but Amazon managed to face these challenges very well.

Yesterday, Amazon announced they are buying One Medical for $3.9 billion. They are paying $18 a share, an 80% premium to Wednesday's closing price. That may seem like a steep premium, but the 12-month high for One Medical is $30, and the all-time high in February 2021 was $58. Amazon is taking advantage of the selloff in loss-making but fast-growing companies.

Amazon's 2022 Prime Day, which ended Wednesday, was its biggest ever The e-commerce giant sold over 300 million items worldwide during this two-day discount extravaganza. The sale also helped boost traffic on competing sites of other retailers like Walmart and Target, who held their own discount days

I read a research note from JP Morgan, about Amazon. Their analysts, Doug Anmuth and Bryan Smilek think that Amazon should be trading at $200 per share by year-end. It's at $109.56 now.

When you get your Vestact mini-statement late this Friday night you will probably notice that the Amazon share price has dropped by over 90%. Fear not, the amount of shares you own is now 20 times more. The much anticipated Amazon stock split happened yesterday.

Amazon reported first-quarter earnings on Thursday night last week, and the shares fell 14% on Friday to $2 485 a share. That was the lowest closing price for the stock since June 2020 and its largest one-day drop since July 2006.

We are always telling our clients to follow the fortunes of the companies that they own, not their share prices. This can be hard when a share price has fallen a lot, because the immediate assumption is that the company is in trouble. Sometimes it is, but often it is not.

We mentioned last week that Amazon is doing a stock split and a $10 billion share buyback this year. I wanted to focus today on the buyback part of the announcement.