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☆ Amazon stock sinks after its warning on AWS growth erases a post-earnings rally
▼ + stars: | 2023-04-28 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

Amazon shares fell 5% Friday after the company warned about future revenue growth in its cloud division. That erased an earlier rally after-hours Thursday that could've added $135 billion in valuation to the tech giant. CFO Brian Olsavsky said some Amazon Web Services customers were cutting their costs in preparation for a potential economic slowdown. But shares slumped during a post-earnings conference call where executives warned of a likely slowdown in revenue growth at Amazon Web Services. "We are seeing these optimizations continue into the second quarter with April revenue growth rates about 500 basis points lower than what we saw in Q1," he added.

☆ Amazon is the growth laggard of the cloud industry now
▼ + stars: | 2023-04-28 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +4 min

Amazon said cloud revenue trended down by 500 basis points in April, suggesting year-over-year growth of 11%. The three largest cloud companies reported results in recent days and the growth picture for Amazon Web Services is, well, cloudy. Microsoft's Azure cloud unit grew sales by 31% year over year in the first quarter, while Google Cloud reported a 28% increase. So that suggests a year-over-year growth rate of just 11% for the early part of the second quarter. AWS is still the largest cloud provider, but if Microsoft continues to outgrow Amazon every quarter, the gap will narrow.

That meant revenue growth rates were about 5 percentage points lower in April than in the first quarter, he said, referring to a period that saw a sequential drop. Its economy-wary customers aside, Amazon aimed to project confidence for its cloud longer-term. Jassy said the growing adoption of generative AI, which can create text, imagery and other content from past data, represented a huge opportunity for Amazon's cloud. Likewise, Olsavsky told reporters, Amazon had seen no shift in the competitive balance among cloud providers. AWS sales growth slowed to 15.8% in the first quarter.

☆ Amazon is spending less on warehouses — and more on AI and its cloud business
▼ + stars: | 2023-04-27 | by ( Sindhu Sundar | ) www.businessinsider.com time to read: +3 min

Amazon signaled its commitment to AI investment amid a surge of interest in the technology. Amazon plans to build "the world's best personal assistant," CEO Andy Jassy told analysts Thursday. "And we are adding more dollars for large language models and generative AI." Amazon CEO Andy Jassy echoed the company's commitment to AI, saying the e-commerce giant would be among the few companies to prioritize developing large language models, the technology behind generative AI tools like chatbots. "If you look at the really significant leading large language models, they take many years to build, and many billions of dollars to build," he told analysts Thursday.

☆ Cloud leaders Amazon, Google and Microsoft show the once-booming market is cooling down
▼ + stars: | 2023-02-04 | by ( Jordan Novet | ) www.cnbc.com time to read: +3 min

Amazon , Microsoft and Alphabet , the three leaders in the market for cloud-based storage and servers, all reported deceleration in their respective businesses. On Thursday, Amazon Web Services and Google Cloud, which also includes Workplace productivity software, showed revenue for the fourth quarter that was below analysts' estimates. Google Cloud revenue growth slowed to 32% in the fourth quarter from almost 38% in the third period. Amazon , which pioneered the market over 15 years ago and maintains a commanding lead, said AWS revenue growth decelerated to 20% from 27%. "As we look ahead, we expect these optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters," Olsavsky said.

☆ Amazon CEO Andy Jassy just joined the company's earnings call for the first time ever and shared 4 of his top priorities: 'Each era is different'
▼ + stars: | 2023-02-03 | by ( Eugene Kim | ) www.businessinsider.com time to read: +5 min

Amazon's CEO Andy Jassy made his first ever appearance on the company's quarterly earnings call. "We'll continue to work really hard on being sharp on pricing," Jassy said. In the current economy, customers are "very conscious" about how much they're spending, Jassy said, which makes pricing an even more important factor for them. "We'll continue to work really hard on being sharp on pricing," Jassy said. "We will continue to work very hard on those customer experiences, and we have a lot more planned," Jassy said.

Alphabet Inc (GOOGL.O), which has the smallest cloud business among the three, said Google Cloud grew 32%, the slowest rise since the company began reporting the measure in 2019. "Once thought as the most defensive revenue stream in tech, we are seeing investors questioning the cyclicality for the (cloud) business," analysts at Bernstein said. Microsoft's revenue in its so-called intelligent cloud business that includes Azure rose 18% to beat expectations for October to December. Amazon finance chief Brian Olsavsky said on Thursday that the company expects slower cloud growth rates for the next few quarters. "Those (AI) advancements and demand for related cloud services will take time to materialize.

And while Amazon's holiday revenue beat Wall Street's expectations, sales growth from its lucrative cloud-computing division slowed during the fourth quarter. Amazon Chief Financial Officer Brian Olsavsky told reporters that the company expects slower cloud growth rates for the next few quarters as it worked with customers to optimize costs. Olsavsky also said the company remains nervous about consumer spending and how people will prioritize budgets moving forward. Facing high inflation and an uncertain economy, CEO Andy Jassy has aimed to slash costs across Amazon's vast array of businesses. The division fell short of estimates of more than $22 billion in fourth-quarter cloud sales, increasing them 20% to $21.4 billion.

☆ Amazon is shutting some Fresh and Go stores as the company cuts costs
▼ + stars: | 2023-02-02 | by ( Annie Palmer | ) www.cnbc.com time to read: +3 min

Amazon will also temporarily halt expansion of its line of Fresh grocery stores until it can find a format that differentiates the company's offering from others in the industry. Amazon currently operates several dozen Fresh grocery stores and 28 Amazon Go convenience stores, according to its website. The Information reported in December that a handful of built-out U.S. Amazon Fresh stores sat vacant, signaling a pullback in the company's grocery strategy. Amazon has been determined to crack the grocery segment since the launch of its Fresh grocery delivery service in 2007. Last March, Amazon announced it would slim down its physical stores portfolio by shutting all its Amazon Books, 4-star and Pop Up shops.

☆ Leaked documents show Amazon's seller lending business is booming. But the company's economists are worried about defaulters.
▼ + stars: | 2023-01-04 | by ( Eugene Kim | ) www.businessinsider.com time to read: +5 min

Amazon economists expect its seller lending volume to roughly double this year. Amazon's lending business has rebounded in recent years after scaling back during COVID. Amazon's lending program is part of a broader business to business payments and lending team, known internally as ABPL. The company's economists are forecasting that third-party sellers will owe it over $2 billion over the next year, according to internal document obtained by Insider. The potential growth in loans signals a continued rebound of Amazon's lending business.

☆ Here's a strong signal that America's inflation woes may be ending. Amazon economists expect the price of the company's products will rise slowly next year and start to fall in 2024.
▼ + stars: | 2022-12-23 | by ( Eugene Kim | ) www.businessinsider.com time to read: +3 min

Amazon's product prices grew at a slower pace than US inflation this year. Amazon's economists believe its product prices will increase at a slower pace going forward. Amazon's product prices increased by 6% in 2022, which is below the average inflation range of 7% to 9% in the US this year, the document said. Amazon expects its product prices to grow below 3% in 2023 and then turn negative in 2024, it added. In an email to Insider, Amazon's spokesperson said the company's leadership team disagreed with its own economists.

☆ Leaked internal documents show Amazon is cutting costs further in anticipation of a severe economic downturn
▼ + stars: | 2022-12-22 | by ( Eugene Kim | ) www.businessinsider.com time to read: +2 min

Amazon's economists expect the company's growth to slow as cost cuts continue. They said Amazon's growth and profitability have historically been "negatively correlated." Amazon is cutting costs across the board in anticipation of a severe economic downturn. That likely means Amazon's revenue growth will also slow down, according to an internal macroeconomic report obtained by Insider. The report, put together by Amazon's economic, finance, and science teams, is part of the company's internal research into the broader macroeconomic landscape.

☆ Amazon may have slowed its warehouse expansion, but it still added space equal to half of Walmart's distribution capacity this year
▼ + stars: | 2022-12-16 | by ( Emma Cosgrove | ) www.businessinsider.com time to read: +4 min

Even so, Amazon's warehouse footprint is "remarkable" compared to competitors, analysts say. Amazon added roughly half of Walmart's distribution network this year and will keep adding in 2023. The company delayed new building openings and canceled 11 million square feet of projects this year, according to Wells Fargo, citing Wulfraat. But Amazon's moves are by no means a retreat since the company continues to improve delivery speeds and dominate the US market in terms of warehouse footprint. Between 2020 and 2022, Amazon added more than 200 million square feet of warehouse space, doubling its physical footprint in the United States.

The holiday shopping season is in full effect as Thanksgiving week begins, and retailers are nervous. Data from the research group Factset show inventory levels among retailers including Walmart, Target, Amazon and Best Buy remain significantly above pre-pandemic levels. But those sales events are also coming at a time of a slowing economy and the ongoing weight of inflation, retail executives say. Despite the mixed economic signals, the U.S. Census Bureau reported unexpectedly strong retail sales for October. The National Retail Federation said earlier this month that it expects annual holiday sales growth to hit between 6% and 8%.

☆ Amazon has made history as the first public company ever to lose $1 trillion in market value, as the tech sell-off worsens
▼ + stars: | 2022-11-10 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

Amazon has become the first public company ever to lose $1 trillion in market value, per Bloomberg. Its share price closed 4.3% lower at $86.14 on Wednesday, taking its market value down to $879 billion. Amazon's market value was nearly $1.9 trillion in July 2021. That's almost like losing Google parent Alphabet's worth of market value, which is now around $1.13 trillion. Amazon's market value fell below the $1 trillion mark on November 1, days after the company posted mixed third-quarter earnings and projected the company's slowest fourth-quarter growth ever.

☆ Why technology spending will rise even as tech stocks tank and layoffs mount
▼ + stars: | 2022-11-07 | by ( Tim Mullaney | ) www.cnbc.com time to read: +6 min

The path of tech demand has been one of the key questions as markets try to handicap the odds of a 2023 recession. "CEOs and CFOs have no intention of cutting tech spending," said Gartner chief forecaster John-David Lovelock. On the bright side, the GDP report painted a picture of fairly strong technology demand, said Bank of America Merrill Lynch economist Michael Gapen. The shortfall in investment spending was driven by a sharp decline in residential investment, he said. In percentage terms, cloud spending will rise by about 20 percent for the next two to three years, according to Gartner's forecast.

☆ Amazon pauses corporate hiring, citing 'unusual macro-economic environment'
▼ + stars: | 2022-11-03 | by ( Samantha Delouya | ) www.businessinsider.com time to read: +2 min

Amazon announced it would pause new corporate hires. Amazon joins big tech companies like Meta, Netflix, and Alphabet in announcing a hiring freeze amid an economic slowdown. Galetti told employees the company expects to keep the hiring freeze in place "for the next few months." The e-commerce giant had alluded to plans to freeze hiring in the past few weeks. The company is not alone in rethinking its hiring practices amid a slowing economy: Meta, Alphabet, and Netflix all announced hiring freezes this year.

☆ A hiring freeze finally comes to Amazon Web Services as enterprise spending slows
▼ + stars: | 2022-11-03 | by ( Katherine Long | Ashley Stewart | ) www.businessinsider.com time to read: +3 min

Meanwhile, at least two AWS engineering orgs are planning to freeze headcount until the end of 2023, according to two current employees. People who depart may be replaced, but the goal is to keep total headcount static, according to two of the current employees. AWS reported its slowest revenue growth ever last quarter, which Olsavsky attributed to reduced enterprise spending as cloud customers gird themselves for potential economic turmoil. Amazon announced a hiring freeze in its advertising business on Tuesday, Bloomberg reported. The New York Post reported last week on a hiring freeze in AWS.

☆ Amazon has frozen headcount at its growing advertising business, after it posted a glum fourth-quarter outlook amid slowing sales: reports
▼ + stars: | 2022-11-02 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Amazon has frozen headcount at its growing advertising business, Bloomberg reported on Tuesday. Amazon has frozen headcount at its growing advertising business, Bloomberg reported on Tuesday, citing a person familiar with the matter. A hiring freeze at Amazon's fast-growing ad business is important, because it underscores the fact that the company is doubling down on profitability. Although advertising isn't Amazon's largest business, it's one of the e-commerce giant's fastest-growing areas, Insider reported in August. In the third quarter of 2022, Amazon's ad business grew 25% to $9.55 billion in the third quarter of 2022 from a year ago.

☆ What our Big Tech holdings signaled on expenses and hiring this earnings season
▼ + stars: | 2022-10-31 | by ( Kevin Stankiewicz | ) www.cnbc.com time to read: +11 min

We want to see that happen with the Club's holdings, so we paid close attention to what management teams at our Big Tech stocks signaled on costs during this mixed earnings season. Head count grew by 22% on an annual basis, 6 percentage points of which was due to acquisitions that closed in the prior two quarters. "Our sequential head count growth from Q1 to Q2 will be minimal. ... We've added a lot of head count over the past 12 months, and we want to make sure we use those head count in the most productive way possible," Hood said this week. "We are holding some teams flat in terms of head count, shrinking others, and investing head count growth only in our highest priorities," Wehner said.

☆ Everything you want to know about Big Tech's disappointing earnings
▼ + stars: | 2022-10-31 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

For today's newsletter, I caught up with some finance pros over the weekend to get a sense of what we can learn from last week's earnings disappointments. Tech earnings were a huge disappointment and analysts don't see much relief on the horizon. "The common thread between the mega cap tech earnings reports this week is the companies' unwillingness to cut costs aggressively ahead of an economic slowdown, in spite of investor expectations," he said. What was your biggest takeaway from last week's Big Tech earnings? On the company's earnings call, its CFO said the surging dollar has cost Amazon more than $900 million more than expected.

☆ Wall Street's biggest banks say Amazon is still a screaming 'buy' despite its ugly earnings results. Here's why, and where they see future growth coming from.
▼ + stars: | 2022-10-31 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +4 min

The company's share price has dropped by more than 15% since then. Amazon's third-quarter earnings disappointed investors on Thursday, sending the company's stock into a tailspin. What's Wall Street saying? Outcry over grueling and unsafe working conditions from employees has not tipped the scale for shareholders or Wall Street analysts. His firm holds Amazon stock.

☆ Tech earnings just flopped. From Amazon to Meta and Microsoft, here are the biggest takeaways
▼ + stars: | 2022-10-29 | by ( Phil Rosen | ) www.businessinsider.com time to read: +4 min

Tech heavyweights like Meta, Amazon, and Microsoft flopped this past week, while Apple reported mixed results. Experts explain the obstacles in front of Big Tech, and what the takeaways from earnings are. Apple proved to be the lone strong point among Big Tech stocks. Weakness in digital advertisingAs the broader economy slows down thanks to the Federal Reserve's interest rate hikes, tech companies have faced a softening in advertising revenue. Big Tech spendingMeta, Alphabet, Microsoft and Amazon reported deceleration in key business lines, but all four insisted they will continue to invest despite the slowdown, Gil Luria, technology strategist at D.A.

☆ In Europe, consumer businesses like Amazon face holiday reckoning
▼ + stars: | 2022-10-28 | by ( Jeffrey Dastin | ) www.reuters.com time to read: +3 min

The extraordinary plummet put Europe in the spotlight for a company typically hurting from expansion in more emerging markets. Brian Olsavsky, Amazon's chief financial officer, told reporters: "Fuel cost and the impacts of the Ukraine war are hitting the economies in Europe even harder than the U.S., and that's showing up in consumer spend." "Consumer sentiment in Europe is at an all time low," Unilever PLC (ULVR.L) Chief Financial Officer Graeme Pitkethly told reporters, warning likewise of rising inflation and depleted household savings. Mastercard Inc's (MA.N) chief financial officer said Thursday that the credit card provider so far noticed little change in European consumer spending volumes. Still, a wide range of multinational companies have warned of weakness in European markets.

☆ ECB policymakers stick with hike plans even as recession looms
▼ + stars: | 2022-10-28 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

[1/2] Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. But policymakers on Friday appeared to be on message that rates will keep going up. Investors now see ECB rates peaking at around 2.75%, above levels near 2.5% seen on Thursday after the ECB's rate hike and language tweaks. RECESSIONThe policymakers' reinforcement of the rate hike message comes as a recession now looks almost certain, and will likely prompt a barrage of further criticism from European leaders. But ECB chief Christine Lagarde pushed back on the criticism on Thursday, arguing that breaking inflation was the ECB's chief mission and governments could help by providing targeted support for the most vulnerable.

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