Shannon Saccocia, CIO, Boston PrivateAmazon.com, Inc.AMZNCOMMENTAug 04, 2023

Its web services will ultimately matter in AI and are going to be a big winner along with big companies like Google. Winning companies over time will be the ones that own the distribution endpoint. Amazon has the best distribution endpoint control. He would make it a top pick again. Note that in past tech booms, companies that have relationships with customers are the ones that make the money ultimately.

After the Midterms, the market expects fewer data centres to be made, which will force Amazon to slow its build, therefore to rein in its capex. That's why shares jumped 4.49% today.

Despite Friday's negative reaction, Amazon's quarter was a good one. Yes, they're still spending alot on data centres, but revenues beat huge, though didn't lift EPS enough. Shares today returned Amazon to September levels when most tech didn't do well.

AWS gives them a strong AI cloud engine, while ads and retail also generate income. But Amazon is more economic sensitive to peers.

It's one of the five biggest spenders in capex on data centres. This week, they reported a top and bottom line miss. They will spend more in capex in 2027. The cloud business grew 39% and projects growth above 40% in 2027 and 2028--a good reason to invest more in compute, but cash flow was negative for the third-straight quarter. Customer demand is there, but so is the cost. The market was wrong to sell of this stock.

They report next week. AWS, the biggest cloud name, will show mid-30s growth, he expects.

She bought more. They report next week and she expects a strong quarter. AWS could accelerate from 37% growth last quarter to 42-43% because they have doubled their capacity; AWS is one of their highest-margin businesses. She expects margins to expand in retail. Trades at only 17x forward PE.

A good, long-term company. Good chart. Fine for a buy-and-hold investor. It's innovative and operating in many areas. He'd enter if it pulls back.

Massive capex means cashflow will be negative for a bit. AI capacity buildout ahead of revenue raises execution risk. A weak consumer could hurt. Stake in Anthropic makes earnings very volatile.

Last quarter, revenue up 20% and EPS up 43%. AWS grew 37%, fastest pace in 18 quarters. Ads grew 26%. Retail margins keep improving as delivery density and automation increase (those buildouts from years ago are bearing fruit). Growing 22%, trading at 18.5x. PEG ratio's even better than GOOG. No dividend.

If you look at the S&P 500, 40% is information technology (adding META and GOOG gives you another 8%). That's almost 50% in the US tied to large-cap tech names. He can't have that high a weight in client portfolios. He went with GOOG and MSFT.

Evolved really well. Over time, generates more and more cashflow. AWS is phenomenal, but retail is less good. Company is still a well-run business. Valuation's somewhat reasonable. Strong growth profile.

One of the best retail assets in the world, and one of the best plays on AI infrastructure. Multiple's come way down. Earnings should still grow 20%. PEG ratio of 1x, a great bargain. AWS growth well above expectations last quarter, with strong margins. Long runway of earnings growth. No dividend.

Not a typical value-manager favourite ;)  Not cheap, but reasonable for what it is. Blowing a ton of cash on AI capex. Premier platform for so many things we want and need. Network effect of global users. Strong balance sheet. Growing operating cashflow. AWS such a growth engine. Ad revenue rolling in. No dividend.

For the most part, a 10-year hold. Long-term winner. Stay with it.

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.