Amazon (AMZN) – More Upgrades – January 5, 2024
DA Davidson’s sell-side analyst must read my newsletter. He upgraded shares this past week. It was based on two things. First, is optimism surrounding an AWS growth bottom and Amazon’s compelling GenAI product suite. We are just a handful of months removed from Wall Street thinking Azure would leave AWS behind in the GenAI dust. I said not so fast then. I’ll say not so fast today while the rest of the analyst community hops aboard.
The second reason for optimism is more expected commerce share gains across the globe. These gains will likely be more pronounced outside of North America (its most mature market by far), but the sell-sider still sees more commerce share gains here too. Its unparalleled Prime subscription, unmatched delivery times and wildly broad product offering all put it in the best position to keep winning. And as we’ve discussed in detail, its regional fulfillment overhaul, its supply chain as a service offering, Buy with Prime, flexible courier program etc. are all margin levers it is pulling to make sure growth is margin accretive.
Separately, Bank of America sees margin outperformance in 2024 thanks to advertising. Who could have possibly guessed? More of the same for this wonderfully boring executor and uniquely easy investment.
Source: YCharts
