Amazon (AMZN) – Encouraging Datapoint, Sports & More – January 20, 2024

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Amazon (AMZN) – Encouraging Datapoint, Sports & More – January 20, 2024

Encouraging Datapoint

Piper Sandler published some research on cloud spending appetite this week. It measured the “net intentions” for customer spend following all of the workload optimization taking place over the last year +. For all cloud providers except AWS, spend intentions worsened from the middle of 2023 to the end of 2023. Specifically, AWS rose from 56% to 58%, Azure fell from 66% to 60% and Google Cloud fell sharply from 62% to 38%. That 38% is now in line with IBM and just ahead of Oracle. Internal advertising demand surveys from the firm were also “positive.” Its expectations for Q4 2023 and Q1 2024 are generally in line with consensus.

Sports

As previously rumored, Amazon is buying a stake in Diamond Sports Group. This is the owner of Bally Sports and has content rights to a few dozen professional sports teams. These games will now be offered on Amazon’s streaming service. Live sports are perhaps the best tool for attracting eyeballs to an increasingly large selection of streaming services. That’s why it’s spending on relationships like this and NFL game rights too. As a Disney & Amazon shareholder, I’d selfishly love to see the two partner up on ESPN. ESPN’s new NFL relationship would make the already compelling partner all the more enticing to work with.

In other Amazon news:

  • It’s working on releasing a new version of its Alexa software. It will supposedly launch a paid subscription for the virtual assistant in 2024. More subscriptions… more margin accretion. Every small piece (and bigger pieces like the regional fulfillment overhaul and ad-load growth) will add up.
  • It’s firing 5% of its “Buy with Prime” employees. This is supposed to be a fulfillment growth story, so that was a surprise. Still, the firm added that it remains a key focus and that it will continue to invest into the segment.
  • Amazon will invest $15 billion to expand its Japanese cloud footprint.
  • Regulators are going to block the iRobot acquisition. This doesn’t really matter a lot to me, but I still find it extremely silly. You’re going to tell me Microsoft… the tech giant and owner of Xbox and Minecraft… can buy Activision Blizzard? But Amazon can’t buy the maker of Roomba for fears of cornering the ~all-important~ robot vacuum market. Good job, regulators. You rock.
  • Mizuho named Amazon its top pick in 2024. It sees above consensus AWS growth.

Source: YCharts

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