Amazon's CapEx Guidance Drives Pre-Market Pullback
Trading Dynamics:
* Pre-market trading on Friday witnessed a 3% drop in Amazon (AMZN) shares, reaching $231.80.
* AMZN was the most active ticker on Yahoo Finance, surpassing post-earnings outperformer Palantir (PLTR).
Earnings Performance:
* Revenue guidance for Q1: $151-$155 billion (below analyst estimates of $158 billion).
* Currency fluctuations expected to impact revenue by $2.1 billion.
* CapEx guidance of $104 billion this year, significantly exceeding analyst forecasts of $80-$85 billion.
Analyst Insights:
* Pivotal Research analyst Jeffrey Wlodarczak remains bullish, citing expected sales re-acceleration in AWS and increased AI adoption driving cloud revenue.
* DA Davidson analyst Gil Luria reiterates a Buy rating, emphasizing AWS's strong adoption across services, including AI-related offerings.
* JP Morgan analyst Doug Anmuth views GenAI as a significant opportunity for Amazon and supports the company's substantial infrastructure investment to support AI demand.
* Wedbush analyst Dan Ives maintains an Outperform rating, highlighting potential catalysts for growth, including AI contributions to AWS, automation improvements, and Project Kuiper monetization.
Key Takeaways:
* Heavy capital expenditure plans are being viewed positively by analysts, suggesting confidence in Amazon's long-term growth potential.
* Strong underlying performance in AWS, physical stores, and operating income support the bullish outlook.
* Despite pre-market pullback, analysts remain optimistic about Amazon's future performance.