Analysts will be keenly watching Amazon.com Inc.’s
AMZN,
online shopping and AWS businesses when the e-commerce juggernaut reports second-quarter results after markets close Thursday.
The performance of both could go a long way in determining the overall health of the retail and cloud markets, two key economic engines. Here’s what to look out for, numbers-wise:
What to expect
Earnings: Analysts tracked by FactSet expect Amazon to report 35 cents a share in earnings, compared with a loss of 20 cents a share a year before. On Estimize, which crowdsources projections from hedge funds, academics and others, the average projection also calls for 35 cents a share in earnings.
Revenue: The FactSet consensus calls for $131.5 billion in revenue, up from $121.2 billion the previous year. Those contributing to Estimize also expect $131.5 billion in revenue.
Stock movement: Amazon shares have jumped 53% this year, with about half of the gains coming over the past six months. The S&P 500
SPX,
is up 17.5% in 2023.
Of the 54 analysts tracked by FactSet who cover Amazon shares, 35 have buy ratings, four have overweight ratings, three recommend to hold and two have sell ratings, with an average price target of $145.29.
What to watch for
It all comes down to three major factors, according to Evercore ISI analyst Mark Mahaney. In a note Sunday, he said he is closely following retail margin recovery after Amazon took actions to regionalize operations; retail sales recovery, based in part on faster shipping; and AWS revenue-growth acceleration.
AI also remains an obsession around Amazon, as it does for nearly every major tech company.
Rohit Kulkarni, managing director of Roth MKM, has gone so far as to rank Amazon No. 1 among mega-cap internet companies positioned to benefit from generative AI in the near term, ahead of Facebook parent Meta Platforms Inc.
META,
and Alphabet Inc.’s
GOOGL,
GOOG,
Google.
