From Morningstar: 2024-11-01 07:07:19

Morningstar has raised its fair value estimate for Amazon to $200 per share from $195 after the company reported strong third-quarter results. Revenue grew 11% year over year to $158.9 billion, with AWS and advertising segments showing strong growth. Margins continue to exceed expectations, with operating profit hitting $17.4 billion.

Amazon’s fourth-quarter outlook includes revenue of $181.5 billion to $188.5 billion and operating income of $16.0 billion to $20.0 billion. The company continues to focus on improving the customer experience, driving order frequency and ticket sizes for prime members. AWS is benefitting from the shift to the cloud and generative AI, with revenue growing 19% year over year to $27.5 billion in the third quarter.

Management believes generative AI can add tens of billions of dollars to revenue over the next several years. Amazon’s profitability improvements have been impressive, with the regional hub model yielding cost savings and improved delivery speeds. AWS remains a key driver for long-term growth, with strong demand for AI solutions driving capital investments in data center capacity. 1. The stock market saw a significant drop today, with the S&P 500 falling by 2.5% and the Dow Jones Industrial Average dropping by 600 points. This was attributed to concerns over inflation and rising interest rates.

2. The latest unemployment report showed a decrease in jobless claims, with 250,000 new claims filed last week. This is the lowest number since the start of the pandemic, indicating a positive trend in the labor market.

3. A new study revealed that 70% of Americans have at least one dose of the COVID-19 vaccine, with 60% fully vaccinated. This is a milestone in the country’s vaccination efforts, but health officials are urging more people to get vaccinated to reach herd immunity.

4. In international news, tensions continue to rise between Russia and Ukraine, with reports of increased military activity along the border. The United States and European allies are closely monitoring the situation and calling for a peaceful resolution to the conflict.



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