Amazon: Why You Shouldn't Miss Out On Buying The Post-Earnings Dip (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Amazon's Q4 FY24 results met expectations, but weak Q1 FY25 guidance led to a 4% stock dip in after-hours trading. I think this is an opportunity to buy the dip.
• Amazon's focus on reducing per-unit costs in its retail commerce business and lower freight shipping costs can boost margins.
• AMZN's focus on chip design to reduce reliance on NVIDIA's GPUs and save costs via in-sourcing can lead to long term 50% EBIT margins for AWS.
• Despite trading at an 18% premium to comps, Amazon's margin levers, scale and growth prospects justify the valuation.
• High capex investments in FY25 may pressure FCF margins in FY25; this is a key risk to tolerate to some extent but also monitor for excessive degradation.

Read the full article here.