[Earnings Preview] Is Amazon seeing another drastic increase in sales and profit? Will it return to the all-time high

In the previous financial results for Q4 '23, sales were 169.96 billion dollars, up 14% from the previous year, and operating profit was 4.8 times 13.2 billion dollars, all of which exceeded market expectations. It was a double-digit increase for 3 consecutive quarters, and it was the first high level in 5 quarters since the 2022/7/9 fiscal year. Also, according to the published Q1 guidance,Strong operating profit outlookIt was shown.The addition of generative AI (artificial intelligence) function was successfulThen, both cloud and e-commerce (EC) servicesYear-end sales seasonIt has been doing well. Received good financial results and overtime transactionsShares rose 8%I did it.

According to the financial results for the first quarter, the marketAI、Cost reduction measures、Accelerating AWS growth、Ad revenue momentumI'm paying attention to it. Amazon is also predicting steady sales growth and profitability with guidance for the first quarter of 2024.

Investors areAmazon Web Services (AWS) TrendsPay attention to it. AWS has recorded early double-digit growth in the past few quarters, and it is one of the growth drivers that the company is paying the most attention to. Analysts say AWS's Q1 sales$24.56 billion, up 15% year over yearIt is expected (sales for Q4 '23$24.2 billion, up 13% year over year). This isFirst time since Q4 2021、This means that the cloud computing sector will accelerate growth for 2 consecutive quartersI'll do it.

Analysts predict that generative AI will increase corporate spending on cloud services. In other words, it means that the three major providers, Amazon, Microsoft, and Google, are competing for AI computing host positions.

Amazon to rivals Microsoft and Alphabet regarding the use of AI in cloud computingSomewhat behindIt is seen as. However, the companyAI initiatives have been strengthened in recent monthsThen, they partnered with AI startup Anthropic to develop generative AI applications. In March, Amazon announced that it had invested an additional 2.75 billion dollars in Anthropic and completed a 4 billion dollar deal with the company since the end of last year.AWS will be a major beneficiary of AI integrationIt is expected that as competition intensifies, it will help you gain an advantage in cloud competition.

Amazon's advertising business is also attracting attention. The advertising businessWill be the fastest-growing division in the first quarterIt is predicted. According to FactSet, analysts say sales$11.74 billion, up 23.5% year over yearI'm predicting that. The company'sPrime Video ad deploymentlaunched earlier this year, strengthening Amazon's position in the rapidly growing streaming advertising market.Record additional revenue of billions of dollars over the long termThere is a possibility.

Who are the analysts at Wedbush SecuritiesPrime Video adsIf fully implemented around the world,”$6.5 billion increase in revenueIt was pointed out that there is a possibility that” will be created. They also found in a recent survey thatApproximately 56% of advertisersAd spending on Amazon in the first quarter compared to the same period last yearincrease of at least 10%、A quarter increased by 20% or moreI said that I answered. What is Wedbush's quarterly advertising revenue24.5% year-on-year increase、23% increase by the end of the full yearI'm predicting that. A successful advertising business is likely to contribute to Prime Video's growth as an independent business and improved profitability.

While the stock prices of other big tech companies skyrocketed drastically, Amazon originallyIt has a high varietyCurrently, it is growing even more. As of 4/24, Amazon's 12-month price-earnings ratio (PER)Less than 39 timesSo, it's second only to Tesla, but it's about 30 times higher than NVIDIA and Microsoft.

Nevertheless, analysts have maintained the company's “buy” ratings. According to FactSet, out of 63 Amazon stock analysts,95% “buy”Ratings have been maintained.

Wedbush analysts say Amazon's target stock priceRaised from $220 to $225That's it. “The company has recorded operating profit exceeding expectations (of Wall Street) for 5 consecutive quarters, and we expect operating profit for the first quarter to be 11.6 billion dollars, which is approximately 5% above analyst consensus.