Amazon.com, Inc. (AMZN)

As we're speaking today, AMZN is literally clearing the 200-day MA. Since 2022, stock's been below that MA. That's a big deal. A lot of eyes on that moving average. Intermediate-term trend is now up. Next upside target is around $130, 17% upside from current levels.

Consumer discretionary business.
AWS holding business together.
Competitive space in web services.
Out of seasonal period for Amazon.
Company going sideways on share price.
Wait until October to buy shares.

They report this week. He's long this name, but worried more about this than Meta. Laying off 20,000 workers among 1.5 million doesn't compare to Meta's cutbacks. Amazon has not performed like Microsoft; it's far below its high.

Believes investment during Covid-19 pandemic was too much.
Recovering from large capital investments.
eCommerce shopping not as strong as pandemic highs.
Large fixed costs will take time to recoup.
Amazon Web Services growing extremely well.

Has bounced, along with a lot of the US tech giants. A cyclical, the largest component of the US consumer discretionary index. Big driver of e-commerce is consumer confidence and retail spending, which is turning down. Cloud computing is a secular growth industry, but investment will be delayed if corporate confidence wanes. Not cheap. Better chance to add later.

A very strong business that is presenting a good buying opportunity.
Quality business with very strong assets.
AWS and eCommerce business top decile.
Good long term hold for next 5-10 years.

A great company and they're right to lay-off staff and reduce real estate holdings. This will go lower in a recession, but we have shifted permanently towards buying online. AWS is seeing competition though. Hold if you own, but otherwise wait for the summer doldrums. Higher rates will also lower this stock.

On March 23 this year, shares closed at $98.71. Amazon has round-tripped, and because Amazon doesn’t pay a dividend, shareholders who clung to that ride have earned less than 4%. That doesn’t keep pace with inflation which is the highest in 40 years. Consider that over the last three years, Meta has climbed 30%, Microsoft 86%, Alphabet 88%, Apple 158% and Tesla 465%. Read TD and Amazon: Buy on Weakness? for our full analysis.

They're different from other megatechs, because they have many pressures on them--cloud and retail. This is not a cheap stock, close to 40x PE. This is a pure show-me story in a decelerating economy. AWS's market share in 2016 was 74% but 51% today. There will be margin pressure.

PE is over 60x this year, and 39x forward for 2024. It's going down. They'll probably cut more costs. The stock has performed badly in the last two years, so management is doing everything to become more efficient, so the layoffs are a step in the right direction.

Simply, they hired 746,000 during the pandemic, and they've announced 18,000 total layoffs earlier this year. So, the layoffs are a blip. Cost-cutting is important for these mega tech stocks. They are moving from products to services, which makes sense. They have room to grow. They had an EPS miss, but beat on revenue last quarter. They need to work on the balance sheet.

Job cuts are coming in their most profitable division to protect margins. This is important. The consumer is weakening and business spending is shrinking. Tech is in a recession (for the past 6 months). Doesn't mean stock prices will decline further.

Doubling down on stock with recent market sell off.
Dominates cloud services. 
Massive investment in distribution unrivaled. 
Very well run business.
Covid-19 demonstrated value of Amazon business.
Great long term investment. 
Company 20% larger today and 60% cheaper. 

Continues to own shares.
Believes company is very strong.
Top Pick on March 17, 2024.
Will continue to hold.

A disappointment, but only over the timeframe. Good, long-term holding. Leader in e-commerce, which comes down to its logistics capabilities. The story going forward is about improving margins and profitability. Cost growth should come under control. Upside from ads and AWS should become larger parts of the business, and are vastly more profitable than the group.