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Bloomberg's Mark Barton posed a very interesting question to UBS's Eric Sheridan: Is Amazon.com, Inc. (NASDAQ:AMZN) playing "mind games" with investors?
What 'Mind Games'?
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Barton highlighted a report from an analyst who noted Amazon earned $724 million in its recent quarter — a large and impressive number by most measures. But when taking a step back, Amazon's earnings don't seem rather impressive given its $35 billion revenue base.
Meanwhile, sales grew by $6 billion and net income grew by $200 million, which may indicate that Amazon is playing "mind games."
Sheridan answered that Amazon remains "focused" on driving revenue growth "above and beyond" profit margins. The analyst emphasized that Amazon takes nearly every dollar of gross profit and reinvests it back into the business through price improvements, speed of delivery and global expansion, among many other initiatives.
"They believe they are far from an un-finished product in terms of what they can offer as a retailer globally and they are going to continue to invest that way," the analyst added.
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Peak Amazon?
Sheridan was then asked to make the case that Amazon hasn't reached its peak — a view Trip Chowdhry of Global Equities Research made late last year and again last week by analysts at Pacific Crest who think this is "as good as it gets."
Sheridan believes Amazon is a $165-billion run-rate company growing by 24 percent at the top line. This is un-matched on a global scale with a "very long run-way ahead of retail sales moving online and Amazon will be the main beneficiary across the world (except for China)."
Sheridan also noted the "very early innings" of Amazon's AWS segment and the company is an industry leader in the very fast growing market.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.