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Strategies & Market Trends : Young and Older Folk Portfolio
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To: Max2.0 who wrote (19042)8/1/2025 1:10:12 PM
From: SeeksQuality2 Recommendations

Recommended By
peterad
stockpickeron

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Re: SQ, can you help me understand why AMZN is having a rough day today?

Missed the whisper number on AWS growth.

A few dynamics going on here. Quarterly seasonality, with Q2 being a weak earnings quarter for AWS due to timing of expenses. A huge 36% rally since late April, so the market is primed for profit taking. And AMZN is transitioning from being a rapid-growth company to one that is massively profitable. As part of that they are taking their foot off the "growth at all cost" accelerator.

Revenues continue to increase, at a ~11% rate.

Net margins are increasing at a double digit rate (admittedly a bit lumpy).

OCF increasing at a ~25% rate.

I have them modeled at 20% EPS growth, a 25x terminal P/E, and 11%+ forward total returns. Those are excellent numbers for a company as strong as AMZN. This is a good time to max out your holdings. (By cancelling the option I'm up to a 5.6% position.)
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