Amazon is probably an AI winner, says Evercore's Mark Mahaney

Core Viewpoint - The earnings season revealed that while AI hyperscalers increased their capital expenditures (capex), concerns arose regarding whether this spending was excessive, with varying implications for individual companies [1][4]. Company-Specific Insights - Among the MAG7 stocks, Meta, Google, and Amazon all ramped up their capex spending, with Google and Amazon's stocks performing well due to positive narratives surrounding their growth [2][3]. - Amazon is highlighted as a top pick due to its strong growth in AWS, which is now expected to exceed 20%, and the overall strong demand across the industry [10]. - Amazon's advertising revenue is also performing well, contributing positively to its margins, while its retail business is growing at approximately 10-11% [11][12]. - Netflix is identified as a strong candidate for growth, with potential price increases due to its competitive positioning and a strong content slate, despite not being significantly dislocated in the market [14][16]. Industry Trends - The overall trend shows a material increase in AI spending among hyperscalers, with a focus on measuring the return on AI investments through metrics like revenue and operating income per employee [4][5]. - Consumer demand in discretionary categories, particularly travel, has shown resilience, which is beneficial for internet companies heavily reliant on such spending [7][8]. - The investment cycle and product cycles for companies like Meta are critical, with Meta needing a significant catalyst for its investments in super intelligence to pay off [9].