Amazon: Time To Buy The Dip

Summary

• Revenue growth is mostly steady; the favorable growth outlook in AWS is balanced a bit by lower growth acceleration in ecommerce due to a weaker consumer environment.
• Amazon posted a rare EBIT margin guidance disappointment for Q3 FY24. However, an easing of global container freight rates and internal initiatives to lower cost of sales are margin levers.
• After a strong period of earnings-driven growth, I believe structural margin growth can lead to multiple expansion in the stock.
• The technical pullback I was waiting for on Amazon has come in, which, I think, makes this an ideal moment for buys.