It's Not Cloudy for AWS - Amazon Analyst Takes A Cue From Rivals Google Cloud And Microsoft Azure's Performance - Amazon.com (NASDAQ:AMZN)

Citi analyst Ronald Josey shares his insights on Amazon.Com, Inc AMZN ahead of its 1Q23 results on Friday.
Josey highlighted two key areas, namely 1) AWS revenue growth and profitability; and 2) North American retail margins.
On AWS, 1Q23 results at Alphabet Inc GOOG GOOGL Google Cloud and Microsoft Corp MSFT Azure suggest some early signs of stabilization in the Cloud and expect AWS to have seen similar results.
While Josey believes North American retail margins could show material improvement given headcount reductions, improving fulfillment center or FC efficiencies, and increased fees around FBA or Fulfillment by Amazon, minimum delivery thresholds, and returns, among others, bigger picture, the analyst will look for overall revenue to be relatively in-line with expectations, but for operating margins to come in ahead of consensus.
The full cost benefit of Amazon's November and March announced headcount reductions is likely more of a 2Q23+ event. However, one of the analyst's key takeaways from Amazon's annual shareholder letter is balancing growth investments with operating efficiencies.
Price Action: AMZN shares traded higher by 10.60% at $121.33 in the after-hours on the last check Thursday.
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