Amazon: Worst Case Scenario For AWS Is Still Quite Good

Summary:

  • The slowdown in AWS YoY growth rate was expected due to tough comps and macroeconomic situation.
  • Improvement in macro environment and cost-cutting measures within the cloud unit should help in lifting sales and margin in the next few quarters.
  • We can expect AWS YoY revenue growth rate to be between 10% to 25% and operating margin to be between 20% to 30% till the end of 2024.
  • Even in the worst-case scenario, AWS would be producing operating income of $25 billion in 2025.
  • Long-term investors can take advantage of near-term pessimism in AWS to gain better entry points.

Amazon fulfillment center building in Las Vegas

4kodiak/iStock Unreleased via Getty Images

The slowdown in Amazon’s (NASDAQ:AMZN) AWS revenue growth rate was highly likely as the company was facing a number of challenges. In a previous article on 31st January, Amazon: all eyes on single

Slowdown in revenue growth rate and lower margins in AWS.

Company Filings

Good growth rate in advertising, subscription and third-party services.

Company Filings

Increase in Amazon’s forward revenue estimates.

YCharts


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