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 2022 results on Oct 27.
Amazon 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 its cloud business. The trend is expected to have continued in the to-be-reported quarter.
AWS revenues were $19.7 billion in second-quarter 2022, accounting for 16% of net sales, rising 33% year over year. AWS’s operating income improved 36.3% from the year-ago quarter’s level to $5.7 billion.
We believe that an expanding customer base and a strong discount offering for long-term deals are likely to have driven the AWS top line in the quarter under review.
The Zacks Consensus Estimate for third-quarter 2022 AWS net sales is pegged at $20.8 billion, indicating an improvement of 29.3% from the year-ago quarter’s reported figure.
Click here to know how the company’s overall third-quarter performance is likely 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, AWS launched a cloud region in the United Arab Emirates (UAE) to expand its cloud footprint in the Asia-Pacific. The new region emerges as the second AWS Middle East region of AWS.
In addition, strength across the AWS cloud services portfolio is expected to have continued benefiting the segment’s performance in the first quarter.
Both factors are expected to have aided Amazon in sustaining momentum among its existing customers and attracting new ones.
In the third quarter, AWS was selected by Pick n Pay as the latter’s strategic cloud provider. Pick n Pay leverages AWS services to advance the supply-chain network of its stores, develop digital customer experiences in omni-channel grocery and streamline its operations.
CEAT LTD also leverages AWS cloud capabilities, such as the Internet of Things, analytics, business intelligence and machine learning to invent intelligent tires and carry out its smart manufacturing process seamlessly.
Further, AWS was picked by Delta Air Lines as its preferred cloud provider. Additionally, AWS was chosen by Prasar Bharati News Services in India.
The impacts of the strengthening customer base are likely to have driven AWS's top-line growth in the third quarter.
However, growing inflationary pressure and intensifying competition in the cloud market might have been headwinds to the stock.
Image: Bigstock
Will Solid AWS Momentum Aid Amazon's (AMZN) Q3 Earnings?
Amazon (AMZN - Free Report) is set to report third-quarter 2022 results on Oct 27.
Amazon 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 its cloud business. The trend is expected to have continued in the to-be-reported quarter.
AWS revenues were $19.7 billion in second-quarter 2022, accounting for 16% of net sales, rising 33% year over year. AWS’s operating income improved 36.3% from the year-ago quarter’s level to $5.7 billion.
We believe that an expanding customer base and a strong discount offering for long-term deals are likely to have driven the AWS top line in the quarter under review.
The Zacks Consensus Estimate for third-quarter 2022 AWS net sales is pegged at $20.8 billion, indicating an improvement of 29.3% from the year-ago quarter’s reported figure.
Click here to know how the company’s overall third-quarter performance is likely to have been.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | 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, AWS launched a cloud region in the United Arab Emirates (UAE) to expand its cloud footprint in the Asia-Pacific. The new region emerges as the second AWS Middle East region of AWS.
In addition, strength across the AWS cloud services portfolio is expected to have continued benefiting the segment’s performance in the first quarter.
Both factors are expected to have aided Amazon in sustaining momentum among its existing customers and attracting new ones.
In the third quarter, AWS was selected by Pick n Pay as the latter’s strategic cloud provider. Pick n Pay leverages AWS services to advance the supply-chain network of its stores, develop digital customer experiences in omni-channel grocery and streamline its operations.
CEAT LTD also leverages AWS cloud capabilities, such as the Internet of Things, analytics, business intelligence and machine learning to invent intelligent tires and carry out its smart manufacturing process seamlessly.
Further, AWS was picked by Delta Air Lines as its preferred cloud provider. Additionally, AWS was chosen by Prasar Bharati News Services in India.
The impacts of the strengthening customer base are likely to have driven AWS's top-line growth in the third quarter.
However, growing inflationary pressure and intensifying competition in the cloud market might have been headwinds to the stock.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #4 (Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Asure Software (ASUR - Free Report) , Aspen Technology (AZPN - Free Report) and Amdocs (DOX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Asure Software has lost 14% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 32.8%.
Aspen Technology has returned 62.4% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 18.2%.
Amdocs has gained 8.9% in the year-to-date period. The long-term earnings growth rate for DOX is currently projected at 11.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.