Amazon Q4 Earnings: AWS Is Feeling The Pain


  • Amazon had a year to forget in 2022, with shares tumbling 40% as the company struggled against inflation and a faltering economy.
  • Amazon’s crown jewel, AWS, continued to shine, but growth now appears to be decelerating sharply.
  • The company just released its Q4 results and beat analysts’ estimates on both revenue and operating income.
  • Unfortunately, weaker-than-expected guidance coupled with a drastic slowdown in AWS resulted in shares falling 5% when the market opened.
  • Was this a thesis-busting report from Amazon? Or just a bump in the road to long-term investing success?

Amazon Prime cardboard box thrown into a pile of trash from a full dumpster.

Joaquin Corbalan/iStock Editorial via Getty Images

Investment Thesis

Before diving into Amazon’s (NASDAQ:AMZN) Q4 results, I’ll quickly outline my AWS-centric thesis behind my investment: AWS is a fast-growing, highly profitable business with powerful moats. This should propel Amazon to new heights, and I think

Amazon's Q4 revenue came in ahead of analysts estimates, but revenue guidance came in below expectations

Seeking Alpha / Author’s Work

Amazon's quarterly operating profit came in ahead of analysts expectations, but guidance was weak

TIKR / Author’s Work

AWS growth is slowing rapidly

Author’s Work

AWS operating profit margin is getting worse

Author’s Work

Amazon's annual financials

Amazon / Author’s Work

Amazon AMZN stock share price valuation model

Author’s Work

Disclosure: I/we have a beneficial long position in the shares of AMZN, ETSY, SHOP, DOCN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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