Investors underestimate the variable costs in Amazon’s (AMZN -2.9%) business, costs that...

|By:, SA News Editor

Investors underestimate the variable costs in Amazon’s (AMZN -2.9%) business, costs that could hold back margins for longer than expected, Morgan Stanley says in reiterating an Equal Weight rating on shares. While investors are dazzled with the “incremental gross margin” AMZN achieves, those figures “exclude relevant variable costs, which artificially inflate reported gross margins.”