1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Investors: 286
Ron Westfall from The Futurum Group said in a latest program on Schwab Network that Amazon.com Inc (NASDAQ:AMZN) will see a negative effect of tariffs and its AWS business will also see an impact amid a global slowdown in spending:
“I think there are some alarm bells here, and a lot of it relates to the macroeconomic factors that we’re seeing. For example, Delta and Walmart executives have indicated that they’re seeing some soft spending, particularly on the consumer side, and that can impact Amazon. And that’s linking to the guidance that they provided for Q1 of ’25. Instead of the analyst expectations of $158 billion being fulfilled, they are projecting in the range of $151 billion to $155 billion.
So what’s behind this soft spending trend? I think a lot of it is that there’s still uncertainty about inflation—will it remain tame? And also tariffs, you know, the big headline grabber right now. And we’re seeing, for example, the proposals to implement 10% tariffs to 25% tariffs on China, and this would impact Amazon more than other tech companies because, for instance, 25% of Amazon sales are of products that are made in China, and up to a third of products that are sold on Amazon are through third-party resellers using made-in-China products.
So you can buy all these factors together, and it’s also impacting AWS, their cloud computing unit, and the fact that enterprise spending is also being impacted by these same factors. We can see a dial-back that’s across the board, and thus dampen Amazon’s stock expectations in the very near term.”
Harding Loevner Global Developed Markets Equity Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“During the quarter, we benefited from strong stocks within the Communication Services and Consumer Discretionary sectors. In Consumer Discretionary, Amazon.com, Inc. (NASDAQ:AMZN) reported strong third-quarter results. Revenue increased by double digits, led by growth in advertising and Al products, while the company’s operating margins also hit an all-time high of 11%. The key reasons for the higher margins were that its international e-commerce operations turned profitable, and there was faster growth in its high-margin cloud-computing business.”
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