Earlier this month, Amazon reported weaker-than-expected revenue for the second quarter and issued a disappointing forecast for the current period; the stock fell accordingly. Amazon’s cloud business exceeded analyst estimates, but its advertising unit came up short. The traditional earnings numbers looked good, but under the hood, it was a touch light:
- Revenue: $147.98 billion vs. $148.56 billion expected
- Earnings: $1.26 per share vs. $1.03 per share expected
Amazon must convince investors it can arrest the sluggish growth in its core retail business, as competition heats up, mainly from discount sites like Temu and Shein, allowing Chinese merchants to sell cheap items to U.S. consumers.
- We can see further consolidation by Amazon over the coming months.
MM is cautiously bullish toward AMZN into further weakness
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