Amazon: AWS Powers The Bullish Case In Space, Cloud, And AI

(8min)

Summary

  • Amazon's Q1 results beat estimates, driven by strong AWS and advertising growth, with AWS revenue run rate now exceeding $100 billion.
  • Major growth opportunities lie in AWS's Cloud/AI expansion and Project Kuiper's satellite internet, despite competitive and capital expenditure challenges.
  • Valuation based on conservative EV/EBITDA metrics offers a comfortable margin of safety, supporting 10% upside this year and 34% next year.
  • I rate Amazon a strong buy, as AWS and satellite ventures promise higher-margin growth, outweighing tariff and margin pressures in the retail segment.
  • Looking for a helping hand in the market? Members of The Aerospace Forum get exclusive ideas and guidance to navigate any climate. Learn More »
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tiero

Amazon (NASDAQ:AMZN) reported its first quarter results earlier in May, beating Wall Street estimates on top and bottom line. To me, the exciting parts are mostly the Cloud and AI growth through AWS, with a revenue run rate of over $100 billion, but

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This article was written by

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Dhierin-Perkash Bechai is an aerospace, defense and airline analyst.

Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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