- Dan Ives of Wedbush Securities views Amazon‘s (AMZN) recent earnings as a “sandbag special,” suggesting that despite a conservative forecast, the company outperformed expectations in AWS and advertising, showing strong momentum into 2025.
- Ives highlighted that AWS, despite narrowly missing revenue estimates, is strategically positioned to gain market share, especially with the ongoing AI revolution where Amazon is doubling down on CapEx investments.
- He emphasized the tech sector’s positive outlook, with software companies like Palantir (PLTR) leading in AI, while hardware companies like Cisco (CSCO) might lose ground, illustrating a market where strategic AI and cloud investment will dictate winners and losers.
Dan Ives, Wedbush Securities’ Managing Director & Global Head of Tech Research, provided an optimistic outlook on Amazon’s (AMZN) recent earnings performance during a Bloomberg discussion. He described Amazon’s earnings forecast as a “sandbag special,” suggesting that despite a slightly weaker forecast, the company’s actual performance, particularly in AWS and advertising, exceeded expectations. Ives highlighted that Amazon’s momentum in retail and its strategic capital expenditure (CapEx) in AI and cloud infrastructure positions it favorably for continued growth into 2025.
Ives countered concerns about AWS’s growth by emphasizing that the service is not only meeting but potentially exceeding market expectations when adjusted for currency impacts, with a 19% growth rate. He pointed out that while competitors like Microsoft (MSFT) show higher growth in their cloud divisions, Amazon’s strategy is geared towards gaining market share, especially in the context of the ongoing AI revolution. This perspective was particularly noted in the context of the fourth industrial revolution, where AI adoption is accelerating across tech companies.
Addressing broader market trends, Ives compared the current tech landscape to a chess game, where companies like Amazon are playing strategic moves to stay ahead in the AI and cloud computing race. He dismissed fears about deep spending in CapEx, arguing that such investments are necessary to maintain competitive edge and that a lighter CapEx could signal a lack of commitment to the AI boom. He also forecasted a positive trajectory for tech, with software companies like Palantir (PLTR) leading the charge in AI application, suggesting that the sector’s future looks bright despite short-term market fluctuations. However, he noted that not all tech companies would benefit equally, pointing to potential losers like Cisco (CSCO) in the hardware segment, while The Big Blue (IBM) is seen as gaining ground due to its strategic pivots.
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