Brooke ThackrayAmazon.com, Inc.AMZNWAITJul 31, 2017

One of his larger positions, about 3-4% weighting. He can't predict what the stock's going to do (ask someone like Keith Richards for that ;)  Still likes it for the long term. All divisions are going in the right direction in terms of profitability and growth. 

Attractive part is that it's developing its own chips plus its partnership with Anthropic (and Anthropic has been the surprise this year, delivering outsized revenue numbers). Attractive entry point. Juicier picks among small-cap names that are earlier in the cycle. Cloud services are getting more competitive, with META and SPCX joining AMZN, MSFT, and GOOG.

Underperformed the last year relative to the market, probably due to concerns over spending by hyperscalers. 200-day MA still moving higher, with shares still above. So technically, still very strong. AWS grew 37% last quarter. Still seeing 20+% earnings growth rate.

Clean AI exposure. AWS is the biggest beneficiary of AI in absolute dollars. Painfully stuck in a range that leaves a lot for future upside valuation. Trades at 20x PE, growing almost 20%. Compounds at scale. No dividend.

Absolute leader in what they do. Winning compared to WMT and COST. Consuming more cash than historically due to capex on data centres. Debt level dropping steadily, from 70% to 46%. Growing cashflow. Category killer. Doesn't own it, but he could.

He loves the growth in AWS.

Great earnings (21%) for a reasonable valuation (28x forward PE). PEG ratio is decent. Much more than online shopping -- e-commerce plus AWS, digital advertising, logistics, AI services, custom chips. AWS earnings have exceeded expectations, while AWS has grown 37%. Cloud business is a leader. 

Spending in AI is really paying off. Tangible results through faster cloud growth, wider AI deployment, and improving profitability and logistics in fulfillment centres. One of only 5 companies to have touched $3T in market cap. No dividend.

Is a big holding of his. The CEO assures stockholders that Amazon's large invest in AI will pay off. AWS could become a trillion-dollar business now that it's using AI; it's already Amazon's most-profitable business, far more than Prime. The CEO expects returns from AI will come faster than AWS. The CEO raised capex higher, but shares still rallied, up 4.58% today.

AWS is a real earnings engine, growth accelerated to nearly 40% (fastest pace in more than 4 years). Enormous AI spending finally translating into faster cloud growth, and translating into profits faster than the competition. Headline profit was inflated by a large paper gain on its investment in Anthropic.

AWS grew 37%, a touch below MSFT's Azure 43%, but still amazing numbers that will continue. Their data centres will pay off in only 3 years, also good.

They have a surging backlog, an attractive ROI and long-term growth potential. They lagged, and are catching up now.

AWS, retail and ads all accelerated in growth while profits hit a record high with operating margins of 13.7%. AWS contributes 61% of operating income and is accelerating rapidly. Has lots of momentum. Even if you cut the backlog in half, you still see outsize growth and market share gains. It gives her confidence in the AI space for Amazon.

It's dead money for spending a fortune on AI without seeing a return.

This, Microsoft, Google and Meta will be the distribution point of AI to wide adoption. AWS remains the dominant cloud player. OpenAI divorced from MSFT, so it could not be hosted on AWS. AWS is accelerating investments in data centres and chips, which is where the opportunity lies.

New lease on life in the last year. Natural beneficiary of AI and data centres. At these levels, the kind of name you just hold your nose and buy. Not extremely expensive.