Amazon's Q4 Reminds Investors That Competitors Are Still Trying To 'Catch Up'
Amazon.com, Inc. (NASDAQ: AMZN) may have a lot of competition, but none of them have been able to match the firm's successful cloud business.
"I think Amazon, we have to be very bullish on Amazon Web Services," Global Equities Research analyst Trip Chowdhry told Benzinga. "You need to be very excited about [AWS] because Amazon has invented a completely new industry, which is cloud computing."
Chowdhry said that AWS' competitors -- including International Business Machines Corp. (NYSE: IBM), Oracle Corporation (NYSE: ORCL) and salesforce.com, inc. (NYSE: CRM) -- are still "trying to catch up. [Amazon's] e-commerce business would probably be lackluster, but their AWS business would be a very strong business for them," Chowdhry added.
Doing Right By Wall Street
Cody Willard, a former hedge fund manager and chairman of Scutify (a financial social network), referred to Amazon as a "riddle inside a conundrum because it's all about growth some quarters and other quarters it's all about controlling expenses."
"You never know which quarter they're going to do right by Wall Street on either one of those and you don't know how the market will react to it," Willard told Benzinga.
"Bottom line: Amazon and Google remain the de facto standards of their industries and they remain one of the four horsemen of tech along with Apple and Facebook."
Ability To Profit
Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, said that Amazon's results are a reminder that the company has the ability to "earn quite a bit of money" if they want to turn on the "earnings spigot."
"They just have to not spend so much," Udall told Benzinga.
"It's not like Amazon blew the numbers. The revenue line was a little light. But I think what Amazon is showing is, hey, if we just control expenses a smidge, we can produce earnings power."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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