Evercore ISI's Mark Mahaney: 'Hard to know' whether Prime Day softness was due to consumer or deals

Amazon's Prime Day Performance - Some reports indicate that Amazon's Prime Day deals may not have been as significant as advertised, with some items increasing in price or remaining unchanged [1][2][4][6] - Channel checks suggest Prime Day performance was "soft" or "light" compared to the 4-day Prime Day in July, making direct comparisons difficult [4] - The softness in Prime Day sales could reflect broader consumer weakness, but it's hard to definitively determine [5][6][7] Amazon's Overall Business and Strategy - Surveys indicate that Amazon maintains high levels of customer satisfaction regarding price, selection, and convenience [3][8] - Amazon's pricing algorithm aims to match the lowest prices available, a strategy that has been consistent over the years [9] - AWS (Amazon Web Services) is a key driver for Amazon's stock performance, more so than retail [10][11] AWS Growth and AI - Acceleration of AWS growth in the latter half of the year is crucial, especially compared to competitors like Azure and Google Cloud [11] - AWS backlog accelerated in the last two quarters, exiting at 25% year-over-year growth, indicating future potential [12] - The industry is experiencing an inflection in cloud compute and storage needs due to AI [12] - Supply constraints related to Nvidia chips are gradually being addressed, benefiting AWS [12] - The Anthropic deal, where Anthropic is a major customer for AWS, should contribute to AWS growth [12][13] - If AWS can exit the year with close to 20% year-over-year growth, the stock could increase significantly [13] AI Investment and Efficiency - Companies may be overinvesting in AI, driven by the fear of underinvesting [17] - Revenue per employee for major hyperscalers (Microsoft, Amazon, Google, Meta) has increased over the last 2-3 years, partly due to AI efficiencies [18] - Operating income or revenue per employee has dramatically increased, with some companies like Meta seeing a 70% increase over the last 3 years [19][20] - Companies are likely getting a better return on their AI spend, which is reflected in revenue per employee and improved products [21]