What’s in store for Amazon in the 4th quarter? Analysts are watching growing AI contributions to AWS

Bofa Securities Analyst Justin Post expressed his view of Amazon.com, Inc. (Nasdaq: Amzn) Before the company’s results in the fourth quarter, scheduled for release on February 6th. The analyst maintained one Buy rating and a price forecast of $ 255.

The analyst expects Amazon to report strong results that benefit from Fulfillment and gearing on employees.

The analyst’s $ 187 billion -dollar sales estimate is in line with agreement, while $ 19.7 billion GAAP operating result forecast exceeds the street’s $ 18.9 billion.

The analyst adds that Detaildata supports revenue growth and AWS is likely to meet 19% -20% growth expectations, aided by AI contribution (Neutral Azure Read-Across).

In particular, the analyst writes that data within quarter was positive, with Bloomberg Second Measurement (BSM), which shows stable growth from the year over the year and BAC Credit & Debit Card data indicating accelerating online expenses.

The street estimates 8% North America retail growth, a small deceleration of the third quarter, although data suggests stability or acceleration, the analyst adds.

Post expects the expansion of North America retail margins of 90 bps -Å/Å to 7.0% (vs. consensus of 6.7%), led by the unit’s growth gearing and well -controlled holiday portfolio and shipping.

The analyst has recently revised the estimate for the first quarter of income estimates and factoring in increased FX-Government, which is projected by a 110BPS impact compared to the streets’ estimate of 40 BPS.

Post expects sales guidance in the first quarter of $ 152.25 billion and $ 158.25 billion (street stimat of $ 158.7 billion), which entails a sequential contraction of 17% at the centerpiece.

Remarkably, the company closes its GO store in Woodland Hills, California, this month, which marks a reduction of about half in its GO store portfolio since the beginning of 2023, leaving 16 stores across four states, such as sore A report from WSJ.

When the company closed several of its local stores, Nick Egelanian commented on the president of the retail consulting firm Siteworks Retail that Amazon does not seem to understand the essence of the retail trade, the report highlighted.

Price action: Amzn shares have risen 1.78% of $ 241.65 at the last check Tuesday.

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