Analyst calls AWS the ‘crown jewel’ of Amazon’s portfolio
- HSBC initiates coverage of Amazon shares with a buy rating
- Slowing growth at AWS is short-term and macro-driven
- Customers optimizing spend is a pro-cloud argument, not a sign of weakness
- AWS is considered the ‘crown jewel’ of Amazon’s portfolio
- Only about 15% of workloads are in the cloud, creating big opportunities
- Amazon’s lock-in effect in e-commerce is overshadowed by its structural opportunity in cloud
Wall Street has expressed concerns about slowing growth for Amazon’s AWS cloud-computing business, but HSBC analyst Christopher Johnen believes this outlook is short-term and macro-driven. He argues that customers optimizing spend is actually a pro-cloud argument, not a sign of weakness. Johnen initiated coverage of Amazon shares with a buy rating and considers AWS to be one of the most attractive stories in tech. He emphasizes the importance of AWS and highlights the significant opportunities in the cloud market. While Amazon’s lock-in effect in e-commerce is notable, Johnen believes its structural opportunity in cloud is even greater. Despite the challenges of the pandemic, Johnen expects expense-control efforts to be reflected in future quarters.
Factuality Level: 7
Factuality Justification: The article provides information about a new bull’s perspective on Amazon’s AWS cloud-computing business and argues that the recent de-rating of Amazon’s stock is due to short-term and macro-driven factors. The article includes quotes from an HSBC analyst and highlights the importance of AWS for Amazon’s long-term growth. While the article does not provide extensive evidence or data to support the claims made, it does not contain any obvious misleading information or bias. However, it lacks in-depth analysis and relies heavily on the opinion of the HSBC analyst.
Noise Level: 3
Noise Justification: The article contains some relevant information about Amazon’s AWS cloud-computing business and the analyst’s positive outlook. However, it lacks depth and analysis, and there is a lot of filler content, including unnecessary information about text-to-speech technology and feedback requests. The article also does not provide evidence or data to support the claims made by the analyst. Overall, the noise level is low, but the article lacks substance.
Financial Relevance: Yes
Financial Markets Impacted: Wall Street
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses Wall Street’s concern about slowing growth for Amazon’s AWS cloud-computing business. While there is no mention of an extreme event or its impact, the information is relevant to financial markets as it provides insights into Amazon’s performance and the potential long-term growth opportunity in the cloud industry.
Public Companies: Amazon.com Inc. (AMZN)
Key People: Christopher Johnen (HSBC analyst)
Reported publicly:
www.marketwatch.com 
