From Morningstar: 2024-05-01 02:54:00

Morningstar has increased its fair value estimate for Amazon to $193 per share, citing good first-quarter results. The company plans to boost data center investments in 2024 to meet generative AI demand, though the second-quarter outlook falls short of aggressive estimates. Amazon’s profitable performance has driven share prices higher.

Amazon saw first-quarter revenue grow 13%, with key growth areas in online stores, advertising, and AWS. Operating profit reached a record $15.3 billion, resulting in a margin of 10.7%. International operations also turned a profit for the first time in more than two years, indicating positive long-term prospects for the company.

The retail giant Amazon is focused on improving delivery speed and customer experience to boost order frequency and ticket sizes for prime members. Retail sales saw increases in online stores, physical stores, and third-party sales, while AWS is transitioning to growth with AI playing a significant role in driving revenue upward.

Amazon is well-positioned in generative AI, with plans to enhance data center capacity in 2024. The firm’s profitability improvements have been substantial, with continued opportunity for growth. While second-quarter guidance falls slightly below estimates, Amazon’s long-term prospects are strong with a path to continuous margin improvement over time.



Read more at Morningstar: Amazon Earnings: AWS Growth Accelerates