RBC's Mark Mahaney Says Amazon Is 'The Best Revenue Mix Shift Story In Tech Today

RBC Capital Management's lead internet analyst Mark Mahaney was a guest on

segment to talk about

's next leg of growth. Mahaney started off by stating that he sees several different "potential pillars" of growth ahead for Amazon. He noted that Amazon's business is operating at a GAAP margin of 3 to 4 percent so any new business venture is likely to be margin neutral or accretive although with one possible exception, groceries. "The advantage that Amazon has they are reaching tipping points of scale in their core retail business and the cloud computing business is growing 7 times faster and its 5 times more profitable," the analyst said. "This is the best revenue mix shift story in tech today." Mahaney continued that Amazon should begin to show expanding margins "almost inevitably across the business." As such, Amazon was named Mahaney's top internet pick at the start of the year and recommended that investors take advantage of any investor concern over investment cycles or other questionable practices. He added that Amazon's stock is known to have a noticeable pullback every year or so and investors could take advantage of any near-term weakness to make the name part of their core portfolio - assuming that nothing fundamentally has changed surrounding the Amazon story.