This post was originally published on this site
Amazon.com Inc. will serve as an economic and tech barometer when the e-commerce powerhouse delivers fiscal second-quarter results on Thursday.
Amazon
AMZN,
— and to a lesser extent Shopify Inc.
SHOP,
on Wednesday — will indicate how aggressively consumers have been buying goods online. Online shopping has outpaced retail overall in growth.
Just as significant will be a focus on Amazon Web Services and whether its growth reaccelerates as the market leader. Last week, Microsoft Corp.
MSFT,
said it expects revenue growth from Azure and other cloud services to continue cooling in the current quarter. Meanwhile, Alphabet Inc.’s
GOOGL,
GOOG,
Google Cloud revenue grew 28%, topping Wall Street estimates.
Read more: Microsoft earnings top estimates, but stock falls as execs detail AI’s costs
“We view Azure’s [deceleration in the third quarter] as a slightly cautious read for AWS especially since AWS started seeing optimization later than Azure,” UBS analyst Lloyd Walmsley warned in a note last week.
Those are two of the recurring themes for Amazon, which divides revenue into three segments: North America, International and AWS, which contributed 14.5% to total sales last quarter but has driven the company’s growth.
Read more: Amazon and Apple to headline second-quarter earnings this week
A handful of analysts are bracing for mixed results.
Wedbush Securities’ Michael Pachter on Monday said he expects Amazon to benefit from an uptick in macro sentiment in its advertising, online stores and subscriptions segments, with AWS likely flattish.
Last week, Brian White of Monness Crespi Hardt offered a Jekyll-and-Hyde scenario: While Amazon should richly profit from digital transformation, artificial intelligence, new healthcare-related opportunities and a leaner cost structure, it remains exposed to regulatory actions and lingering economic uncertainty. He cautioned that the Federal Trade Commission may soon file an antitrust suit against Amazon focusing on its online marketplace, citing a recent Bloomberg report.
