Easy Cash4ads»
There's still a lot to like about Amazon (AMZN) stock, even though the company's coming off a hard year, JMP Securities Equity Research Analyst Nick Jones recently told Yahoo Finance Live (video above).
Amazon had a rough 2022, one in which the company's stock tumbled more than 40% throughout the year. The company's been battling high inflation, rising rates, and a slow advertising market, and recently indicated it will be laying off 18,000 employees in its corporate workforce. That's a higher number than was reported in November, when the New York Times said the company was planning to lay off 10,000.
Nevertheless, Amazon's still headed in the right direction according to Jones. "We like Amazon investing in future technology, we like them investing in growth," he said. "For us, we don't think it has to happen. We like the stock from here, today."
The layoffs, Jones said, are not bad news for the company's outlook.
"It's a very small chunk of their workforce," he said, as Amazon's total corporate workforce is about 300,000 strong. "We view it as, 'They're starting to look at operating income.' This is an area that investors are increasingly looking at. They want to see Amazon give better guidance to these numbers as we progress through each quarter. So, while we don't think it's really going to move the needle materially, we like that they're focusing on this and they're making cuts."
Heading into Q4 earnings, Amazon's guidance has been weak, as the company in October said it was expecting to report between $140 billion and $148 billion in revenue to close out the year, missing analysts' expectations.
For all the turmoil the company's experiencing, Jones believes CEO Andy Jassy is playing his cards right, saying that Jassy has gotten caught in the crossfire of a macroeconomic downturn.
"You can't fight the Fed," he said. "You can't fight macro, and I think this is very much a macro, Fed-driven market, and that's really compressing multiples … more so than anything idiosyncratic to what Jassy is doing at the company."
Jassy, who took the helm at Amazon in 2021, sounded off on the company's layoff plans in a statement earlier this month.
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," Jassy wrote on Jan. 4. "These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles. Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year."
So, where does Jones think Amazon will go from here? The key to a successful 2023 for Amazon is for the company's retail business to pick up some steam, while the company's booming cloud unit Amazon Web Services (AWS) boosts its growth.
"It's definitely still an AWS story," said Jones. "I mean, we still want to see retail work. I think advertising is under-appreciated, but heading into a recession it's hard to like advertising going into 2023. So, we really need to see AWS start re-accelerating. We need to see estimates start increasing from the retail segment."
The truth is, the macro needs to even out before we know what Amazon's next moves will look like.
"We need to bottom out in terms of estimates and get more visibility on the macro situation," said Jones. "Is the Fed going to continue to increase rates and by how much? I think once we get some visibility into the cost of capital, where rates are going, that's when investors can start to pick their heads up and think about what the back half of '23 and '24 looks like."
Editor's Note: The headline of this story has been updated to reflect that Amazon's layoffs are in progress and have not been completed.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.
Click here for the latest trending stock tickers of the Yahoo Finance platform.
Read the latest financial and business news from Yahoo Finance.
Download the Yahoo Finance app for Apple or Android.
Follow Yahoo Finance on Twitter, Facebook, Instagram, LinkedIn, and YouTube.
Related Quotes
By Lisa Thompson NASDAQ:GROM Fresh off a December $5.0 million capital raise and reverse split in December, Grom Social Enterprises (NASDAQ:GROM) is poised to capitalize on a number of promising initiatives over the next several months. The company now has 3.2 million in fully diluted shares and trades at a market capitalization of $5.5 million. It has approximately $4 million in cash after its
Investors are especially charged up about fuel cell specialist Plug Power (NASDAQ: PLUG) though. As of 11:14 a.m. ET, shares of Plug Power are up 7.8%. Investors are particularly interested in the announcement since Plug Power and Nikola inked a hydrogen supply agreement in December.
Exceptionally high short interest in these innovative and transformative businesses may lead to a short squeeze.
Energy stocks can be a great place in the market to find dividends that you can hold forever. Energy companies are often less speculative than growth stocks, and are built to generate consistent returns on investments over time. Here a look at why I love Kinder Morgan (NYSE: KMI) and TotalEnergies (NYSE: TTE) and their 5.9% and 4.6% respective dividends — and why Petrobras (NYSE: PBR) doesn't have a sustainable dividend to bet on.
The Oracle of Omaha never saw a future in cryptocurrency.
“The final stages of the bear market are always the trickiest,” Morgan Stanley’s CIO Mike Wilson wrote on Sunday. “We’re not biting on this recent rally.”
Wake up and smell the diesel.
Johnson & Johnson on Tuesday released financial guidance for fiscal 2023 that came in above Wall Street expectations, despite warnings earlier this month from the company’s CEO that the broader economic picture remains uncertain. The company said it expects adjusted earnings of $10.55 a share in 2023, well above the FactSet consensus estimate of $10.33. “While we had inflationary pressures that will persist in 2023, we’ve been pretty diligent and disciplined with respect to prioritizing top investments, and managing some of the costs,” Johnson & Johnson ‘s chief financial officer, Joseph Wolk, told Barron’s early Tuesday morning.
GE earnings due Tuesday will provide the first company outlook since the spinoff of its health care business this month. GE stock rose.
VZ stock fell as Verizon Communications issued 2023 earnings guidance well below expectations. Its outlook for wireless services revenue growth topped views.
3M Co. shares slumped lower Tuesday after the industrial group posted weaker-than-expected fourth quarter earnings, while unveiling 2,500 job cuts, while warning of 'persistent' global economic challenges. 3M said adjusted profits for the three months ending in December were pegged at $2.28 per share, 7% from the same period last year and 8 cents shy of the Street consensus forecast. Group revenues, 3M said, fell 5.8% to $8.1 billion, just ahaed of analysts' forecasts of an $8.04 billion tally.
In this article, we discuss 11 most undervalued natural gas stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 5 Most Undervalued Natural Gas Stocks To Buy According To Hedge Funds. In 2022, the oil and gas industry experienced exceptional financial success, resulting in a […]
What can we say about 2023? We’ve just come off a truly challenging year, with a difficult bearish trend pushing stocks down across the board, especially in the tech sector. In this environment, transparency – the ability to see beneath appearances – has grown more important than ever. Cathie Wood, founder of the ARK Invest funds and a long-time booster of technology stocks, describes the current economic conditions as a crisis. According to Wood, we’re in a moment of declining money supply, det
3M is cutting about 2,500 global manufacturing jobs as demand for its products rapidly softened toward the end of the year. The maker of Scotch tape, Post-it Notes and more said Tuesday that sales for the fourth quarter had fallen 6%, weighed down by currency fluctuations. Organic sales, a metric that strips out currency effects, acquisitions and divestitures, grew slower than the company had anticipated, Chief Executive Mike Roman said.
Investors need to pay close attention to Lumen (LUMN) stock based on the movements in the options market lately.
Intel may report another negative earnings surprise when it reports fourth quarter results and guidance on Thursday, according to Citi.
Yahoo Finance Live anchors discuss the earnings expectations for tech companies like Microsoft and Tesla.
In this article, we will take a look at the 15 biggest natural gas pipeline companies in the world. If you want to see more companies in this selection, go to the 5 Biggest Natural Gas Pipeline Companies in the World. In the past five decades, the consumption of energy globally has increased by over […]
Raytheon Technologies Corp. (RTX) said Tuesday it had net income of $1.422 billion, or 96 cents a share, in the fourth quarter, more than double the $686 million, or 46 cents a share, posted in the year-earlier period. Adjusted per-share earnings came to $1.27, ahead of the $1.24 FactSet consensus. Sales rose to $18.093 billion from $17.044 billion a year ago, below the $18.200 billion FactSet consensus.
The wireless service provider reports fourth-quarter adjusted earnings of $1.19 a share, matching analysts' expectations.