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Amazon's (AMZN) AWS Momentum to Drive Growth in Q3 Earnings
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Amazon (AMZN - Free Report) is set to report third-quarter 2018 results on Oct 25.
The company continues to gain momentum in the rapidly growing cloud market on the back of its cloud computing division, Amazon Web Services (“AWS”) which was launched a decade ago.
This division has now become an integral segment of Amazon, thanks to its growing adoption rate and popularity. Further, AWS offers strong discounts for long-term deals and advance payments to its customers. This continues to help the company in expanding customer base.
All these have been aiding AWS in generating significantly higher margins compared with the traditional retail business. Notably, this is very crucial for Amazon’s profitability.
Click here to know how the company’s overall third-quarter performance is likely to be.
AWS Dominates the Cloud market
Per the latest Synergy Research report, AWS acquired 34% market share up 1% sequentially. AWS continues to dominate despite increasing competition from Microsoft (MSFT - Free Report) , Alphabet’s (GOOGL - Free Report) Google Cloud and Alibaba’s (BABA - Free Report) cloud platform, which have been witnessing year-over-year growth in their market shares.
In the last reported quarter, AWS net sales totaled $6.11 billion and accounted for 11.6% of total net sales. The figure surged 48.9% from the year-ago quarter and also surpassed the Zacks Consensus Estimate of $5.99 billion.
Further, AWS operating income soared 79.3% year over year to $1.64 billion (55.03% of total operating income) in the last reported quarter.
We believe AWS will continue to deliver solid results driven by its growing clientele and expanding services portfolio. The Zacks Consensus Estimate for AWS revenues in the to-be-reported quarter is pegged at $6.7 billion.
Amazon’s strong focus toward expanding its cloud services portfolio is a major positive and will continue to enhance its key offerings.
Further, high performance rate and rapid deploy ability has made AWS’ tools desirable for small businesses as well as enterprises. This remain a tailwind for the company to gain further traction in the cloud market.
During the to-be reported quarter, the company has made its Aurora Serverless available to the general public. Notably, this is a new deployment option for Amazon Aurora.
Aurora Serverless aids users in managing their database without maintaining any instances. It ensures automatic scaling, start and shut down of databases as per the user’s need.
Further, the company announced the general availability of T3 instances and high memory instances for Amazon Elastic Compute Cloud (Amazon EC2) which helps in running large in-memory databases seamlessly.
Additionally, AWS has extended its partnership with Salesforce.com to integrate its products with those of Salesforce. The deal allows the integration of AWS PrivateLink with Salesforce APIs and Amazon Connect with Salesforce Service Cloud. The company ensures seamless and secured sharing of data to AWS customers.
All these strong endeavors will continue to expand its customer base in the near term as well as in the long run. The company has acquired quite a number of clients in past three months which remains a positive.
Formula 1 has selected AWS for its services such as Amazon SageMaker, AWS Lambda, AWS Elemental Media Services and AWS analytics to leverage the machine learning and data analytics capabilities of these services.
Apart from this, the company added Epic Gamesand Major League Baseball to its clientele. Further, AWS extended its partnership with 21st Century Fox, per which the latter will be moving its key platforms and workloads to AWS.
Consequently, all these are likely to drive the AWS revenues in the to-be-reported quarter.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Amazon's (AMZN) AWS Momentum to Drive Growth in Q3 Earnings
Amazon (AMZN - Free Report) is set to report third-quarter 2018 results on Oct 25.
The company continues to gain momentum in the rapidly growing cloud market on the back of its cloud computing division, Amazon Web Services (“AWS”) which was launched a decade ago.
This division has now become an integral segment of Amazon, thanks to its growing adoption rate and popularity. Further, AWS offers strong discounts for long-term deals and advance payments to its customers. This continues to help the company in expanding customer base.
All these have been aiding AWS in generating significantly higher margins compared with the traditional retail business. Notably, this is very crucial for Amazon’s profitability.
Click here to know how the company’s overall third-quarter performance is likely to be.
AWS Dominates the Cloud market
Per the latest Synergy Research report, AWS acquired 34% market share up 1% sequentially. AWS continues to dominate despite increasing competition from Microsoft (MSFT - Free Report) , Alphabet’s (GOOGL - Free Report) Google Cloud and Alibaba’s (BABA - Free Report) cloud platform, which have been witnessing year-over-year growth in their market shares.
In the last reported quarter, AWS net sales totaled $6.11 billion and accounted for 11.6% of total net sales. The figure surged 48.9% from the year-ago quarter and also surpassed the Zacks Consensus Estimate of $5.99 billion.
Further, AWS operating income soared 79.3% year over year to $1.64 billion (55.03% of total operating income) in the last reported quarter.
We believe AWS will continue to deliver solid results driven by its growing clientele and expanding services portfolio. The Zacks Consensus Estimate for AWS revenues in the to-be-reported quarter is pegged at $6.7 billion.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote
Growing AWS Adoption Rate
Amazon’s strong focus toward expanding its cloud services portfolio is a major positive and will continue to enhance its key offerings.
Further, high performance rate and rapid deploy ability has made AWS’ tools desirable for small businesses as well as enterprises. This remain a tailwind for the company to gain further traction in the cloud market.
During the to-be reported quarter, the company has made its Aurora Serverless available to the general public. Notably, this is a new deployment option for Amazon Aurora.
Aurora Serverless aids users in managing their database without maintaining any instances. It ensures automatic scaling, start and shut down of databases as per the user’s need.
Further, the company announced the general availability of T3 instances and high memory instances for Amazon Elastic Compute Cloud (Amazon EC2) which helps in running large in-memory databases seamlessly.
Additionally, AWS has extended its partnership with Salesforce.com to integrate its products with those of Salesforce. The deal allows the integration of AWS PrivateLink with Salesforce APIs and Amazon Connect with Salesforce Service Cloud. The company ensures seamless and secured sharing of data to AWS customers.
All these strong endeavors will continue to expand its customer base in the near term as well as in the long run. The company has acquired quite a number of clients in past three months which remains a positive.
Formula 1 has selected AWS for its services such as Amazon SageMaker, AWS Lambda, AWS Elemental Media Services and AWS analytics to leverage the machine learning and data analytics capabilities of these services.
Apart from this, the company added Epic Gamesand Major League Baseball to its clientele. Further, AWS extended its partnership with 21st Century Fox, per which the latter will be moving its key platforms and workloads to AWS.
Consequently, all these are likely to drive the AWS revenues in the to-be-reported quarter.
Currently, Amazon carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>