Amazon Stock: Bulls Remain Optimistic Despite Mixed Q4 Results
Despite a lackluster fourth quarter, Amazon (AMZN) continues to garner support from investors amidst broader market weakness.
AWS Performance and Generative AI Investments
Amazon Web Services (AWS) performance met expectations, despite capacity constraints faced by competitors. Morgan Stanley's Brian Nowak highlights the company's strategic investments in generative AI, including improvements to suggestion algorithms, advertising products, and inventory management.
Margin Outlook and Growth Potential
Nowak believes Amazon's retail business could experience margin expansion, driving stock growth. While the first quarter outlook fell short of expectations, analysts have adjusted their revenue estimates.
Capital Spending and AWS Slowdown
Amazon's significant capital spending guide of $104 billion and a slight slowdown in AWS growth to 19% year-over-year have raised concerns. However, AWS margins have improved, and Amazon recently reported its highest quarterly operating income.
Near-Term Catalysts
Nowak identifies two potential catalysts for Amazon's stock:
* Feb. 26 Alexa event in NYC, potentially introducing a paid subscription product for the Rufus Alexa agent.
* March launch of Amazon's Kuiper-1 satellite rocket.
Investment Insights
Brian Sozzi of Yahoo Finance offers insights from industry leaders on Opening Bid three times a week. Stay informed on the latest technology and business news from Yahoo Finance.