Stockchase Opinions

Richard Fogler Amazon.com, Inc. AMZN-Q WAIT May 01, 2025

AMZN vs. AAPL

The consumer-related companies are taking it on the chin, so AMZN's retail side is taking a hit. Cloud business is great. Imports all its goods, and can more easily switch to importing from countries other than China. He's not buying much of anything now, but if he were, he'd probably pick this one.

$190.510

Stock price when the opinion was issued

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PARTIAL BUY

Acting pretty well today. Indicators are trying to turn up, meaning some of the selling is maxed out and people are stepping in. Support around $175, then heavy support around $155. After that, support level is ~$110.

BUY

He'd prefer this to SHOP, as AMZN is way more broadly diversified. Plus its cloud business is a massive business. Because of cyberattacks, a company of any size is forced to use cloud services either from AMZN or MSFT. Fears of recession are hitting all retailers and e-tailers.

BUY

Is -28% from February's high. The fear is that tariffs will crush their core e-commerce business; most of their goods are made overseas which will get a lot more expensive. But they've become more of a consumer staples business like Walmart, and they have the scale to force the suppliers to eat the tariffs. They also have a sticky Prime business and AWS has enough to growth offset weakness in retail. Trades at 25x PE, half its historical average.

HOLD

Large-cap tech names have seen big pullbacks. This name is off by close to 30%, valuation now more attractive. She owns it in a US-equity, growth-focused fund. AWS is the leader in cloud, helps offset lower retail margins. 

Capex increasing to build out data centres; worries that overspending will not earn great returns in the near term. Concern that tariffs and a slower economy may impact retail spending. Have to wait and see the tariff story over the next 90 days.

HOLD

This quarter should be OK. Last quarter saw growth by double digits in retail, cloud, and advertising. Increased same-day delivery by 60%, pretty incredible. Great business. Tariffs on goods from China can be passed on to customers. In a bad economic environment, consumers love the cheaper prices.

It's the next quarter where we might see some volatility around the stock price.

PAST TOP PICK
(A Top Pick May 15/24, Up 0.2%)

Loves the name longer term, but sold a month back. Disappointing when you pick a stock that's the belle of the ball until the Trump wrecking ball comes along. Growing ~19%, trading at 23x. Not expensive. Analysts are assuming clarity; if we don't get it, estimates will fall. 

Be careful. Never forget that lots of people have made stunning amounts of money for a long period of time. These stocks don't owe you anything. If you're going to buy, do it incrementally.

BUY

They report Thursday. Retail is consolidating into three giants: this, Costo and Walmart. But Amazon has major tariff problems with China, though he likes what he hears about their retail business outside China.

TOP PICK

No matter what happens with tariffs, when you think about retail there are no companies more dominant than AMZN, COST and WMT. AMZN is by far at the biggest discount to peers. Also, leading cloud computing in AWS with stable and expanding margins. Best diversification of cashflow.

Whatever the retail environment looks like, they'll win. No dividend.

(Analysts’ price target is $245.40)
HOLD

AWS rose 17% YOY, but missed, but more Nvidia chips would have led to a beat. Believes in this long term.