Cheong Hong Yuan: Interpreting Amazon's Third Quarter Financial Report - Where is the Dawn of Growth? - 1 views
started by anonymous on 30 Oct 23
started by anonymous on 30 Oct 23
Start a New Topic » « Back to the Investment & Personal Finance group
Amazon's financial report released on October 26th showed that the company has achieved significant results in the e-commerce and cloud services sectors. Cheong Hong Yuan mentioned that although its revenue and profits exceeded market expectations, the growth of its cloud services business was not as outstanding as Microsoft and Google. This is something investors should pay attention to. However, what is more eye-catching is Amazon's performance during the financial report conference call. Its CEO predicted that generative artificial intelligence is expected to bring "billions of dollars" in revenue to AWS cloud services in the coming years, undoubtedly injecting new vitality and hope into Amazon's cloud services.
From a technical analysis perspective, "The Three Golden Moving Average Strategy" is a strategy that Cheong Hong Yuan often uses. He believes that this strategy can effectively track stocks with strong market performance and accurately determine the buying opportunity. Looking at Amazon's stock price trend, it entered a downward channel last Monday, falling 18% from the 52-week high reached on September 14th, and is in a technical correction range. However, it is worth noting that even so, Amazon's increase this year still exceeds 42%, a figure that clearly surpasses the S&P 500 and Nasdaq indices during the same period, making it the king of large tech stock gains this year.
Cheong Hong Yuan believes that this trend indicates that although the stock price has experienced fluctuations in the short term, Amazon is still in a strong upward channel in the long term. Its strong financial performance, including a 13% year-on-year revenue growth, earnings per share far exceeding market expectations, and a significant increase in operating profit margin, provide solid support for its stock price.
As for the future outlook, Cheong Hong Yuan believes that Amazon's efforts to adjust its business strategy and reduce costs have begun to yield results. Since last autumn, Amazon has significantly reduced its workforce and closed some unprofitable businesses, aiming to cope with the current macroeconomic environment, especially the challenges of high inflation and high interest rates. Such a strategy is undoubtedly wise because in such a complex economic environment, only by streamlining and operating efficiently can organizations better cope with various uncertainties.
Cheong Hong Yuan believes that Amazon's third-quarter financial report reflects the absolute dominance of this tech giant in the global market. Although the financial report mentioned that the growth rate of its cloud services is not as good as Microsoft and Google, its absolute market share and scale still make it the market leader. However, this also means that it faces greater growth pressure and challenges.
Cheong Hong Yuan believes that from this financial report, it is evident that Amazon has not only maintained steady growth in the North American and international markets but also successfully controlled costs and improved operating profit margins. In addition, Amazon has responded to the dual pressures of high inflation and high interest rates by significantly reducing costs and adjusting its business structure. Such strategic adjustments and execution demonstrate Amazon's outstanding management capabilities in the current economic environment.
This financial report also reveals some concerns about Amazon. Cheong Hong Yuan mentioned that Amazon's revenue guidance for the fourth quarter is slightly conservative, which may reflect the company's concerns about the upcoming year-end shopping season. Especially against the backdrop of global inflation and supply chain tensions, consumer purchasing power and willingness may be affected to some extent. This undoubtedly adds some uncertainty to Amazon's future growth.
Regarding Amazon's cloud services business, AWS, this financial report does show signs of growth. However, Cheong Hong Yuan points out that although AWS's operating profit and profit margin have reached historic highs, its revenue growth is still relatively slow, reflecting the highly competitive global cloud services market and customers' cautious attitude towards cloud spending. In this context, Amazon needs more innovation and strategic adjustments to maintain its leading position in the cloud services market.