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Amazon.com Announces Second Quarter Sales Up 20%

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Re: Amazon.com Announces Second Quarter Sales Up 20%

#81

Post by meowface »

ajross wrote: post #77
carlsborg wrote: post #5

Two interesting points: 1) Close to 70% of Amazon operating income once again can be attributed to AWS. Consolidated operating income: $3,084 m AWS operating income: $2,121 m 2) AWS revenue was $8.3B for the quarter, 37% more than the same quarter last year.

What's interesting isn't the fact that they "make" more from AWS, it's that AWS gets premium margins where their store is running right at cost (and has been, basically forever -- it's their thing, sorta). The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B , literally 30x higher. AWS is a tiny drop in the bucket, no matter what the pr…

AWS is basically "run your entire company's engineering as a service" now, and they've done a good job at it. It's not at all easy to compete with such an integrated and battle-tested platform (other than on cost; AWS can be pretty expensive).

Re: Amazon.com Announces Second Quarter Sales Up 20%

#82

Post by MR4D »

brlewis wrote: post #27
mythz wrote: post #11

Earlier quoted context omitted.

As always, it's due to the results being below Wall St estimates that are already priced into the stock which is still trading at an insanely expensive 100 P/E ratio.

Price/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.

P/E is NEVER useless. For instance, if a company misses on earnings, then maybe it was an outlier - an odd quarter of sorts. But if you do it a few times over, then you are not the growth company you thought you were, and your 100:1 p/e will come crashing down to join everybody else (albeit maybe on the high side) somewhere in the upper 20’s or in the 30’s.

But here’s the key - to do that, a stock would have to lose TWO THIRDS of it’s value.

So a really high p/e signals really high growth expectations, and when a company isn’t growing at that expectation, the law of gravity again takes control and it will fall back to earth.

Ignore it at your own peril.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#83

Post by m3kw9 »

sharkweek wrote: post #10

Proof I have no idea how the stock market works: “Wow, that’s insane, their stock must have popped back over 2k because of this news!” checks ticker “Down 2.5% after hours...?”

One of the main metric other than rev is shrinking, could be profit margins, or 20% isn’t as large as most analysts predicted

Re: Amazon.com Announces Second Quarter Sales Up 20%

#84

Post by justicezyx »

ajross wrote: post #77
carlsborg wrote: post #5

Two interesting points: 1) Close to 70% of Amazon operating income once again can be attributed to AWS. Consolidated operating income: $3,084 m AWS operating income: $2,121 m 2) AWS revenue was $8.3B for the quarter, 37% more than the same quarter last year.

What's interesting isn't the fact that they "make" more from AWS, it's that AWS gets premium margins where their store is running right at cost (and has been, basically forever -- it's their thing, sorta). The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B , literally 30x higher. AWS is a tiny drop in the bucket, no matter what the pr…

Simple.

Server multiplexing.

Let's say I increase fleet utilization for 1%. My projected margin increase 1%, not retrospectively though. Plus the projected server hardware price drop. The margin increases naturally. If there were no competitor from Google and MSFT. Amzn would need to be extremely aggressive to not making a log of money.

That's why Google was very confident in winning the Cloud war back in early 2012-2014, and prior to that time frame. Google can operate fleet utilization way higher than industry standard, and clearly is ahead of Amzn then.

But it turns out a business is not that simple as writing code. And obviously, Amzn catches up in fleet efficiency. AFAIK, now Google and Amzn are almost head on head in that department, while Azure is the poor kid lagging behind. But that's not a problem for MSFT. Their strength is in enterprise and conventional developer community building.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#85

Post by m3kw9 »

brlewis wrote: post #27
mythz wrote: post #11

Earlier quoted context omitted.

As always, it's due to the results being below Wall St estimates that are already priced into the stock which is still trading at an insanely expensive 100 P/E ratio.

Price/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.

PE is used as a comparison, if 10 of your peers are at 15 and you are at 30 you may be over priced or the expectations are sky high for you to grow beyond expectations

Re: Amazon.com Announces Second Quarter Sales Up 20%

#86

Post by manojlds »

spenczar5 wrote: post #78
ajross wrote: post #77

Earlier quoted context omitted.

What's interesting isn't the fact that they "make" more from AWS, it's that AWS gets premium margins where their store is running right at cost (and has been, basically forever -- it's their thing, sorta). The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B , literally 30x higher. AWS is a tiny drop in the bucket, no matter what the pr…

I don’t think it’s commoditized. AWS has moved past being just EC2. Virtualization is a small piece or the picture, and building and operating DynamoDB or S3 or SQS are all very tough tasks.

And RDS.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#87

Post by notyourwork »

meowface wrote: post #81
ajross wrote: post #77

Earlier quoted context omitted.

What's interesting isn't the fact that they "make" more from AWS, it's that AWS gets premium margins where their store is running right at cost (and has been, basically forever -- it's their thing, sorta). The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B , literally 30x higher. AWS is a tiny drop in the bucket, no matter what the pr…

AWS is basically "run your entire company's engineering as a service" now, and they've done a good job at it. It's not at all easy to compete with such an integrated and battle-tested platform (other than on cost; AWS can be pretty expensive).

Same thing as a fast food burger versus a restaurant porter house, you get what you pay for.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#88

Post by ethbro »

spenczar5 wrote: post #78
ajross wrote: post #77

Earlier quoted context omitted.

What's interesting isn't the fact that they "make" more from AWS, it's that AWS gets premium margins where their store is running right at cost (and has been, basically forever -- it's their thing, sorta). The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B , literally 30x higher. AWS is a tiny drop in the bucket, no matter what the pr…

I don’t think it’s commoditized. AWS has moved past being just EC2. Virtualization is a small piece or the picture, and building and operating DynamoDB or S3 or SQS are all very tough tasks.

It's not commoditized at the scale Amazon operates it at.

And from an AWS / profit perspective, running the rest of Amazon is essentially what gives them a base consumer to get them to that scale.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#89

Post by dahfizz »

m3kw9 wrote: post #85
brlewis wrote: post #27

Earlier quoted context omitted.

Price/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.

PE is used as a comparison, if 10 of your peers are at 15 and you are at 30 you may be over priced or the expectations are sky high for you to grow beyond expectations

Amazon and e.g Google are not peers. The vast majority of Amazons business is retail, not tech.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#90

Post by kortilla »

notyourwork wrote: post #87
meowface wrote: post #81

Earlier quoted context omitted.

AWS is basically "run your entire company's engineering as a service" now, and they've done a good job at it. It's not at all easy to compete with such an integrated and battle-tested platform (other than on cost; AWS can be pretty expensive).

Same thing as a fast food burger versus a restaurant porter house, you get what you pay for.

Analogy is a little off.

AWS is fast food and expensive because consistency, availability, and volume are what count in the cloud business. You can get better quality VMs for less money but you won’t be able to provision thousands easily and it’s not going to be available 24/7.

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