We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Solid AWS Momentum Aid Amazon's (AMZN) Q3 Earnings?
Read MoreHide Full Article
Amazon (AMZN - Free Report) is set to report third-quarter 2023 results on Oct 26.
The company is expected to have continued gaining from solid momentum in the rapidly growing cloud market on the back of its cloud computing division, Amazon Web Services (“AWS”).
We note that the growing popularity and strong adoption of AWS have been aiding Amazon in generating high margins from the cloud business. The trend is expected to have continued in the yet-to-be-reported quarter.
AWS’ revenues were $22.1 billion in second-quarter 2023, accounting for 17% of net sales, rising 12% year over year.
We believe that an expanding customer base and a strong discount offering for long-term deals are likely to have driven AWS’ top line in the quarter under review.
The Zacks Consensus Estimate for third-quarter 2023 AWS net sales is pegged at $23.19 billion, indicating an improvement of 12.9% from the year-ago quarter’s reported figure.
Click here to find out how the company’s overall third-quarter performance is expected to have been.
The expanding data center network and an increasing number of AWS regions and availability zones are likely to have acted as tailwinds.
In the third quarter, the company launched an infrastructure region in Tel Aviv, Israel. AWS Israel (Tel Aviv) Region is comprised of three availability zones.
Its strength across the AWS cloud services portfolio is expected to have continued benefiting the segment’s performance in the third quarter.
Both factors are expected to have aided Amazon in sustaining momentum among existing customers and attracting new ones.
In the quarter under review, AWS was selected by PT Telekomunikasi Selular (Telkomsel) and Abdul Latif Jameel as a preferred cloud provider. BMW Group and Dr. Reddy’s Laboratories also picked AWS as the preferred cloud provider.
FanDuel also picked AWS as its strategic cloud provider.
Occidental (OXY - Free Report) favored AWS as its preferred cloud provider to enhance operational efficiencies and eliminate upfront capital expenditures.
Occidental is transferring its core production applications and on-premises information technology infrastructure to AWS to accelerate its digital transformation and the development of systems for carbon removal plants.
Meanwhile, Sumitomo selected AWS to drive its digital transformation by migrating its SAP environments to AWS.
Image: Bigstock
Will Solid AWS Momentum Aid Amazon's (AMZN) Q3 Earnings?
Amazon (AMZN - Free Report) is set to report third-quarter 2023 results on Oct 26.
The company is expected to have continued gaining from solid momentum in the rapidly growing cloud market on the back of its cloud computing division, Amazon Web Services (“AWS”).
We note that the growing popularity and strong adoption of AWS have been aiding Amazon in generating high margins from the cloud business. The trend is expected to have continued in the yet-to-be-reported quarter.
AWS’ revenues were $22.1 billion in second-quarter 2023, accounting for 17% of net sales, rising 12% year over year.
We believe that an expanding customer base and a strong discount offering for long-term deals are likely to have driven AWS’ top line in the quarter under review.
The Zacks Consensus Estimate for third-quarter 2023 AWS net sales is pegged at $23.19 billion, indicating an improvement of 12.9% from the year-ago quarter’s reported figure.
Click here to find out how the company’s overall third-quarter performance is expected to have been.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Factors to Consider
The expanding data center network and an increasing number of AWS regions and availability zones are likely to have acted as tailwinds.
In the third quarter, the company launched an infrastructure region in Tel Aviv, Israel. AWS Israel (Tel Aviv) Region is comprised of three availability zones.
Its strength across the AWS cloud services portfolio is expected to have continued benefiting the segment’s performance in the third quarter.
Both factors are expected to have aided Amazon in sustaining momentum among existing customers and attracting new ones.
In the quarter under review, AWS was selected by PT Telekomunikasi Selular (Telkomsel) and Abdul Latif Jameel as a preferred cloud provider. BMW Group and Dr. Reddy’s Laboratories also picked AWS as the preferred cloud provider.
FanDuel also picked AWS as its strategic cloud provider.
Occidental (OXY - Free Report) favored AWS as its preferred cloud provider to enhance operational efficiencies and eliminate upfront capital expenditures.
Occidental is transferring its core production applications and on-premises information technology infrastructure to AWS to accelerate its digital transformation and the development of systems for carbon removal plants.
Meanwhile, Sumitomo selected AWS to drive its digital transformation by migrating its SAP environments to AWS.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Dell Technologies (DELL - Free Report) and Applied Materials (AMAT - Free Report) . While Dell Technologies sports a Zacks Rank #1 (Strong Buy), Applied Materials carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dell Technologies shares have gained 68.8% in the year-to-date period. DELL’s long-term earnings growth rate is currently projected at 12%.
Shares of Applied Materials have gained 58.1% in the year-to-date period. AMAT’s long-term earnings growth rate is currently projected at 6.10%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.