[Earnings Summary] Amazon, the story of growth again? Profits greatly expanded with strong retail and cloud performance, expecting a favorable holiday season as well!
$Amazon (AMZN.US)$ announced earnings after the close of trading on October 31st. The stock price...rose 6% in after-hours trading.7-9 month period
◇The July to September quarter Increased revenue by 11%,Operating profitis市場予想を大幅に上回る
◇main2 major divisions (online store and AWS)isBoth are doing well.
◇Account for 60% of the company's total operating profit.AWS sees a 19% revenue increase.Contributing to profit growth.
◇Outlook for the October-December period.Revenue and operating profit are generallyIn line with market expectations
◇main2 major divisions (online store and AWS)isBoth are doing well.
◇Account for 60% of the company's total operating profit.AWS sees a 19% revenue increase.Contributing to profit growth.
◇Outlook for the October-December period.Revenue and operating profit are generallyIn line with market expectations
![[Earnings Summary] Amazon, the story of growth again? Profits greatly expanded with strong retail and cloud performance, expecting a favorable holiday season as...](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20241101/1730438495469-2e7a437743.png/big?area=105&is_public=true)
July-September performance: Sales expanded strongly, profits significantly exceeded expectations
◇Adjusted EPS(Earnings per share): $1.43, compared to $0.94 in the same period last year, the market forecast was $1.16
◇Operating profitSales were $17.41 billion, a 56% increase year-on-year, with market expectations at $14.7 billion.
(Market expectations are based on Bloomberg's aggregation, as shown below)
![[Earnings Summary] Amazon, the story of growth again? Profits greatly expanded with strong retail and cloud performance, expecting a favorable holiday season as...](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20241101/1730438495161-3fb1a19680.jpeg/big?area=105&is_public=true)
◇revenueRevenue was $158.87 billion, an increase of 11% year-on-year, with market expectations at $157.29 billion.
☆The two main divisions (online stores and AWS) are performing well.
☆In particular, AWS, which accounts for 60% of the company's total operating profit, continues to maintain a strong momentum, contributing to profit expansion.
・ オンラインストア部門の売上高は61.41 billionドル、前年同期比7％増、市場予想は59.64 billionドル
・ クラウド部門（AWS）の売上高は27.45 billionドルで、前年同期比で19％増、市場予想は27.49 billionドル
☆The two main divisions (online stores and AWS) are performing well.
☆In particular, AWS, which accounts for 60% of the company's total operating profit, continues to maintain a strong momentum, contributing to profit expansion.
・ オンラインストア部門の売上高は61.41 billionドル、前年同期比7％増、市場予想は59.64 billionドル
・ クラウド部門（AWS）の売上高は27.45 billionドルで、前年同期比で19％増、市場予想は27.49 billionドル
![[Earnings Summary] Amazon, the story of growth again? Profits greatly expanded with strong retail and cloud performance, expecting a favorable holiday season as...](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20241101/1730438495115-a99c2b3e5a.png/big?area=105&is_public=true)
● 10-12月期見通し：おおむね予想と一致
◇revenueThe range is 181.5 billion to 188.5 billion dollars, with the market expectation at 186.4 billion dollars, slightly above the median expectation.
◇Operating profitThe range is 16 billion to 20 billion dollars, with the market expectation at 17.5 billion dollars, slightly below the median expectation but remaining firm.
◇revenueThe range is 181.5 billion to 188.5 billion dollars, with the market expectation at 186.4 billion dollars, slightly above the median expectation.
◇Operating profitThe range is 16 billion to 20 billion dollars, with the market expectation at 17.5 billion dollars, slightly below the median expectation but remaining firm.
● Online store business
◇The online store business North American division achieved a 9% increase compared to the same period last year, while the international division achieved a 12% increase. Amid consumers being cautious with their spending, our company continued to respond by lowering prices and offering faster delivery, leading to revenue growth.
◇Profitability also improved. With improvements in inventory allocation, the cost structure of the fulfillment network continued to improve.
◇For the July-September quarter, Number of paid membersBenefiting from the 10th annual Prime Day event held in mid-July, the number of paid members increased from the same period last year in both the USA and overseas.
◇Currently, for the first time in the USA, 95% of customers using Amazon Pharmacy can be delivered within 2 business days, and 20% of Prime members in the USA can be delivered within 24 hours. Next year, operations will start in 20 new cities, allowing nearly half of the people in the USA to have medicine delivered to their homes within a few hours.Amazon Pharmacy20% of customers using Amazon Pharmacy can be delivered within 2 business days in the USA for the first time, and 20% of Prime members in the USA can be delivered within 24 hours. Next year, operations will start in 20 new cities, allowing nearly half of the people in the USA to have medicine delivered to their homes within a few hours.
◇AI generationWe leverage koss corp extensively and have released hundreds of apps under development. For consumers, we have expanded the shopping-oriented AI chatbot 'Rufus' to major european index countries. In the usa, we have enhanced personalization, added features to narrow down customer intentions, and included real-time pricing and trade information.
● AWS Business
◇AWS revenue increased by 19.1% year-on-year, reaching an annual run rate of $110 billion. AWS growth has accelerated again in the past four quarters.Growth has accelerated again in the past four quarters.Is doing.
◇AWSOperating profitwas $10.4 billion, an increase of $3.5 billion from the same period last year. The expansion of sales, as well as efforts towards efficiency and cost management (such as hiring and personnel allocation), contributed to this.
◇Our companycore cloud servicesandAI servicesThey are finding opportunities to expand AI services. Customers are increasingly aware that transitioning to the cloud is also necessary to truly benefit from generated AI.
◇Over the past 18 months, AWS has released nearly twice as many machine learning features and GenAI features as other major cloud providers combined.AWS's AI business is a multi-billion dollar revenue-generating run-rate business, growing at a double-digit rate year-over-year.● AI services and custom semiconductors, etc.
◇AWS revenue increased by 19.1% year-on-year, reaching an annual run rate of $110 billion. AWS growth has accelerated again in the past four quarters.Growth has accelerated again in the past four quarters.Is doing.
◇AWSOperating profitwas $10.4 billion, an increase of $3.5 billion from the same period last year. The expansion of sales, as well as efforts towards efficiency and cost management (such as hiring and personnel allocation), contributed to this.
◇Our companycore cloud servicesandAI servicesThey are finding opportunities to expand AI services. Customers are increasingly aware that transitioning to the cloud is also necessary to truly benefit from generated AI.
◇Over the past 18 months, AWS has released nearly twice as many machine learning features and GenAI features as other major cloud providers combined.AWS's AI business is a multi-billion dollar revenue-generating run-rate business, growing at a double-digit rate year-over-year.● AI services and custom semiconductors, etc.
AWS has released nearly twice as many machine learning and GenAI features as other major cloud providers combined.
◇AI servicesBecame the first major cloud provider to offer the 'H200 GPU' through the 'EC2 P5e' instance. $NVIDIA (NVDA.US)$ It is expected that NVIDIA will continue to form a very long-term important partnership.
◇On the other hand, there are also voices from customers seeking better cost-performance for AI workloads. Therefore, the company is investing in its own custom semiconductors for training with Trainium and inference with Inferentia.The custom semiconductorsinvestment Trainium for training and Inferentia for inference. The second version of Trainium, Trainium2, is scheduled to start shipping in the next few weeks. There is a great deal of interest from customers in these chips, and we are in contact with manufacturing partners multiple times to produce much more than initially planned.
◇CloudWhat I (CEO) want to say about it is that even if we increase capacity further, there is more demand than we can handle. Today, almost all companies think that their capacity is less than the demand. And companies can make more supplies available mainly in the field of semiconductors. Therefore, we are growing a significant business in the AI field.
◇AI fieldIt is definitely in the early stages, and I think it is more fluid and dynamic than the non-AI part of AWS. In the early stages of AI, new services are being provided, and people are very excited about it, moving very rapidly. And the profit margin is expected to be lower than we think as time goes by. The same thing happened with AWS. However, as the market matures over time, the field of generated AI is expected to have a very healthy profit margin.
◇AI servicesBecame the first major cloud provider to offer the 'H200 GPU' through the 'EC2 P5e' instance. $NVIDIA (NVDA.US)$ It is expected that NVIDIA will continue to form a very long-term important partnership.
◇On the other hand, there are also voices from customers seeking better cost-performance for AI workloads. Therefore, the company is investing in its own custom semiconductors for training with Trainium and inference with Inferentia.The custom semiconductorsinvestment Trainium for training and Inferentia for inference. The second version of Trainium, Trainium2, is scheduled to start shipping in the next few weeks. There is a great deal of interest from customers in these chips, and we are in contact with manufacturing partners multiple times to produce much more than initially planned.
◇CloudWhat I (CEO) want to say about it is that even if we increase capacity further, there is more demand than we can handle. Today, almost all companies think that their capacity is less than the demand. And companies can make more supplies available mainly in the field of semiconductors. Therefore, we are growing a significant business in the AI field.
◇AI fieldIt is definitely in the early stages, and I think it is more fluid and dynamic than the non-AI part of AWS. In the early stages of AI, new services are being provided, and people are very excited about it, moving very rapidly. And the profit margin is expected to be lower than we think as time goes by. The same thing happened with AWS. However, as the market matures over time, the field of generated AI is expected to have a very healthy profit margin.
● Capital Investment Plan
◇Regarding capital investment, so far this yearInvestment amountIt was $51.9 billion. The full year of 2024 is expected to be approximately $75 billion.
◇Mainly related to AWS,AI servicesInvesting to meet the demand for AI services. At the same time, investing in technology infrastructure to support North American and overseas divisions.
◇Regarding capital investment, so far this yearInvestment amountIt was $51.9 billion. The full year of 2024 is expected to be approximately $75 billion.
◇Mainly related to AWS,AI servicesInvesting to meet the demand for AI services. At the same time, investing in technology infrastructure to support North American and overseas divisions.
Expectations for the holiday season
◇Opened with a successful Prime Big Sale Day in October.At the beginning of the holiday season, we are encouraged.To provide services to customers throughout the season.Prepared and ready.We express our gratitude to the Amazon team for preparing us to delight customers this holiday season by hosting two major Prime member events in the past four months.
◇Opened with a successful Prime Big Sale Day in October.At the beginning of the holiday season, we are encouraged.To provide services to customers throughout the season.Prepared and ready.We express our gratitude to the Amazon team for preparing us to delight customers this holiday season by hosting two major Prime member events in the past four months.
After the earnings report, several analysts raised their target stock prices. In general, the earnings were positively evaluated. As of November 1, the average target stock price is $222.64.
![[Earnings Summary] Amazon, the story of growth again? Profits greatly expanded with strong retail and cloud performance, expecting a favorable holiday season as...](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20241101/1730438495234-92f27ba9e0.png/big?area=105&is_public=true)
Overall, The earnings this time exceeded market expectations and were strong. Both the main online store and AWS performed well, especially since the expectations were not that high.The significant increase in operating profit due to the accelerated growth of AWS is a positive factor.Amazon could once again portray a growth story.It was also suggested that through the introduction of AI services contributing to performance, along with the intention to expand capital investment, it could be considered as a positive point.If we consider the performance and outlook of this time, with a 12-month forward PE ratio of 27.9 times, which is significantly below the 5-year average of 42.5 times, it seems undervalued.ValuationJulie, Market Analyst, as of November 1, 24.
![[Earnings Summary] Amazon, the story of growth again? Profits greatly expanded with strong retail and cloud performance, expecting a favorable holiday season as...](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20241101/1730438681603-6a4c07ca7b.jpeg/big?area=105&is_public=true)
It is also worth noting that Amazon indicated an intention to expand its investment in equipment, which could potentially depict a growth story once again.
Source: Company documents and Bloomberg, created by moomoo Securities
Source: Company documents and Bloomberg, created by moomoo Securities
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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