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Wall Street is bullish on Amazon earnings despite uncertainty around consumer spending, rising investment costs
- Wall Street anticipates solid earnings and upside for Amazon stock despite headwinds created by slowing retail margins and rising investments in other areas of its business.
- CFRA expects revenue to rise 10.5% YoY, anticipating a modest beat of its third-quarter earnings. The operating margins of Amazon are expected to continue growing into 2025, but now reinvestment in other fields may lead to slow expansion.
- Bank of America predicts a mixed bag of results. The bank outlook for operating profit stands above consensus for the third quarter at $15 billion. Investors may be expecting 20% YoY growth for 3Q but BofA expects a slight deceleration in discretionary retail sales growth.
- JPMorgan cited Amazon's cloud platform expansion and solid store growth as bullish drivers. The bank said that the expanding workload migration, easing optimizations, and growing AI monetization will prompt further AWS acceleration throughout this year, leading to 20% growth year-to-date.
- Wedbush Securities cheered Amazon's growing cloud segment and a revenue shift toward high-margin advertising. The firm recommends sticking with the stock through near-term headwinds and rising investment costs.
- Morgan Stanley expects that, even though expected discounting in a competitive holiday season and the consumer's uncertain spending could lead to short term headwinds for AMZN, corporate efficiencies and shipping cost will make lower-priced essentials profitable through 2022.
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