Amazon: Why I’m Bullish But Uncomfortable Buying Now


  • I had rated Amazon a ‘Neutral/Hold’ last June but upgraded it to a ‘Buy’ at the end of Jan this year, capturing +3.96% in active return.
  • Now, I’m revising that to a ‘Neutral/Hold’ again as I note merely adequate growth in its E-commerce segment and reasons to be cautious given the proximity to 4-monthly resistance levels.
  • This is balanced by my bullish outlook on AWS, which I think is well-poised for growth reacceleration as enterprises increase their tech spend allocations.
  • I also think we will see further margin expansion in the stock as the company implements a host of improvements in logistics and advertising, benefiting e-commerce EBIT margins.
  • On the risks side, higher capex and equipment lease expenses are expected to generate AWS growth. I am watching the AWS margin and overall FCF figures for signs of downside surprises.

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Performance Assessment

My last article update on, Inc. (NASDAQ:AMZN) was a year ago. I had held a ‘Neutral/Hold’ stance as I was concerned about the growth prospects. However, 6 months later, just before Q4 FY23 earnings, I changed my stance

Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA 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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