Core Viewpoint - Amazon (AMZN) is positioned as a market-beating stock over the next five years despite short-term risks and uncertainties related to tariffs and the economy [1] Summary by Relevant Categories Company Performance - Amazon is expected to outperform the market in the next five years, indicating strong growth potential [1] Market Conditions - Current market conditions include risks from tariffs and economic uncertainties that may impact short-term performance [1]

Core Viewpoint - The ongoing tariffs on Chinese goods pose significant challenges for Amazon, potentially impacting its retail and cloud businesses due to increased costs and reduced seller participation [1][2]. Group 1: Impact on Amazon's Retail Business - Amazon's third-party marketplace is heavily reliant on Chinese sellers, with over 50% of third-party sales coming from China-based sellers, a sharp increase from less than 20% in 2016 [4]. - The tariffs, currently at 145%, may force Chinese sellers to raise prices or exit the marketplace, leading to a reduction in product variety and potentially driving customers to competitors [5][6]. - A decline in third-party sellers could adversely affect Amazon's revenue from seller services, which generated $47.5 billion in Q4 2024, surpassing both AWS and Amazon Prime combined [3][6]. Group 2: Impact on AWS - AWS faces direct cost increases due to tariffs on server equipment and materials, but a more significant concern is a potential slowdown in IT spending among customers [8]. - Economic uncertainty may lead businesses to prioritize cost-cutting, which could negatively impact AWS revenue, especially as 21% of enterprise cloud infrastructure spending is reportedly wasted on underutilized resources [9]. - A recession could exacerbate these issues, leading to reduced spending from both consumers and businesses, further straining Amazon's marketplace and cloud services [10]. Group 3: Overall Risk Assessment - Given the current tariff situation and its implications, Amazon stock is viewed as a risky investment, with potential declines in revenue from both retail and cloud segments [11].

Core Viewpoint - The recent stock market crash has created opportunities to invest in leading AI stocks, which are currently undervalued despite ongoing market volatility due to tariffs and trade wars [1] Group 1: Nvidia - Nvidia is the market leader in AI chips, holding over 80% market share in the GPU space, with significant revenue growth, having more than doubled sales in each of the past two years [2][4] - The company is well-positioned to benefit from the ongoing AI infrastructure buildout, with predictions that data center capital expenditure will reach $1 trillion by 2028 [3] - Nvidia's stock is currently trading at a forward P/E ratio of 21.5 and a PEG ratio of 0.4, indicating it is undervalued [4] Group 2: Broadcom - Broadcom leads in developing custom AI chips, which, despite higher upfront costs and longer design times, offer better performance and lower power consumption compared to standard GPUs [5] - The company has identified a serviceable market opportunity of $60 billion to $90 billion with its established customers by fiscal year 2026 and has recently added new clients like Apple [6] - Broadcom's stock is trading at a forward P/E of just over 23, and the company has initiated a $10 billion buyback to leverage its low stock price [7] Group 3: Amazon - Amazon, while primarily known for e-commerce, generates most of its profits from cloud computing through Amazon Web Services (AWS), which is experiencing rapid growth due to AI workloads [8][9] - The company plans to invest $100 billion in data center capital expenditure this year to alleviate capacity constraints and has developed custom AI chips for cost advantages [9] - Amazon's stock is trading at 27.5 times this year's analyst estimates, marking one of its cheapest valuations historically [10] Group 4: Meta Platforms - Meta Platforms is advancing AI with its Llama AI model, which has increased user engagement and ad revenue, leading to a 14% rise in average ad prices and a 21% increase in revenue [12] - The company is also developing a new social media platform, Threads, which has grown to 320 million monthly active users and is expected to be monetized in the future [13] - Meta's stock is trading at a forward P/E multiple of only 20.5, indicating it is undervalued [13] Group 5: Salesforce - Salesforce is focusing on becoming a leader in agentic AI through its Agentforce platform, which allows customers to create AI agents with minimal coding [14][15] - The company has introduced an AI agent marketplace to expand use cases, with a consumption-based pricing model of $2 per interaction, representing a significant market opportunity [15] - Salesforce's stock is trading at a forward P/S multiple of 5.7 and a forward P/E multiple under 22, suggesting it is a bargain given its growth potential [16]

Core Viewpoint - The article emphasizes the author's continued investment in Amazon (NASDAQ: AMZN), highlighting a focus on long-term growth and dividend growth investing [1]. Group 1: Investment Strategy - The author prioritizes profitability as a safer driver of gains compared to low valuation, emphasizing the importance of margins, free cash flow stability and growth, and returns on invested capital [1]. - The author actively researches stocks within their areas of competence, showing a commitment to understanding high-quality companies in depth [1]. Group 2: Market Focus - The author monitors both the US and European stock markets, seeking undervalued stocks and high-quality dividend-growing companies for reinvestment opportunities [1].

Group 1 - Amazon.com Inc (NASDAQ:AMZN) experienced a significant selloff, reaching its 24-month moving average, which historically has been a strong buying opportunity, with exceptions in 2008, 2020, and 2022 [2] - The stock price approached the $175 level, which was a resistance point during 2020-2021, and the low of $166 on Friday aligns with the April 2024 low and previous put open interest strikes [3] - Given the technical support levels, it is considered an opportune moment to buy AMZN on the dip, with a recommended call option that has a leverage ratio of 6.0, potentially doubling with an 18.8% rise in the stock [4]

The stock market sold off rapidly over the past few weeks, leading many to label this a stock market crash brought on by President Donald Trump's tariff announcements. Stocks moved down sharply this week as reciprocal tariffs went into effect; they recovered quickly as Trump announced tariff relief on every country except China, but continued to mark additional losses on Thursday.We are a long way from seeing how this all shakes out, but the prevailing notion in the markets is that tariffs will still have a ...

Core Insights - Amazon's third-party sellers are expected to pass tariff costs onto consumers due to insufficient margins to absorb these costs [1] - The company is actively working to keep prices low through strategic inventory purchases and renegotiating terms with vendors [2] - Despite the new tariffs, there has been no significant change in consumer behavior, with some customers potentially buying ahead to avoid future costs [2] Supply Chain and Business Operations - Amazon's AWS cloud computing business has diversified its supply chain significantly over the past five years, sourcing components globally [3] - The high demand for AWS and AI services continues to drive growth, with no signs of demand attenuation [3] Market Impact and Seller Responses - Following the announcement of new tariffs, Amazon has canceled orders from multiple vendors in China and other Asian countries, impacting a significant portion of its sellers [4] - Approximately half of Amazon's merchants are based in China, facing decisions to either increase prices or exit the platform due to the tariffs [4] - Among sellers interviewed, three indicated plans to raise prices for exports to the U.S., while two considered leaving the market [5]

Amazon is stepping in to help weather the tariff storm — only for some vendors. Amazon will pay higher prices to its vendors on a "case-by-case basis" to "share the tariff impact," according to an internal document obtained by Business Insider.That means Amazon will pay some of its wholesale vendors more than the previously agreed-upon prices for their products. By doing so, vendors can offset the increased cost of sourcing their products from countries hit by tariffs. The change reflects the urgency Amaz ...

Group 1 - The article discusses the impact of a general sell-off in the "Mag7" stocks, which have all experienced declines [1] - The Pragmatic Investor focuses on global macro trends, international equities, commodities, technology, and cryptocurrencies, aiming to guide investors through various market conditions [1] - The investment group emphasizes building diversified portfolios to preserve and increase wealth over time [1]

Amazon CEO Andy Jassy thinks companies should invest “aggressively” in AI now to reap the full financial rewards in the future.In his annual letter to Amazon shareholders published Thursday, Jassy said “substantial capital” is required to keep up with the pace of AI innovation and customer demand for AI products. He added that Amazon, too, needs to spend this money now if it hopes to see strong returns on its investment years down the line. Jassy’s comments come after Amazon announced plans during its four ...