AMZN
The bulls are circling
Needham’s Laura Martin is out here treating Amazon like it’s still in the bargain bin. Her pitch: the market is underestimating how much AI, cloud, and Amazon’s giant customer ecosystem can juice earnings over time.
And honestly, the logic isn’t wild. Amazon already owns the kind of infrastructure other companies are now racing to build, which means it can funnel that muscle into higher-margin cloud revenue instead of just sweating through low-margin retail.
AI isn’t just a buzzword here
Martin said most shoppers still go straight to Amazon’s app or website, which helps insulate it from outside AI shopping tools. She also pointed to growing AI use inside Amazon’s own product search — the kind of stat that makes investors lean forward instead of glazing over.
Meanwhile, she contrasted Amazon with Alphabet and Meta, saying those companies are having to spend more heavily on infrastructure too. In other words: welcome to the AI capex club, where everyone’s writing giant checks and hoping the payoff shows up before your patience runs out.
Cloud is the real plot twist
The retail business still looks like the houseplant that drinks all the water but doesn’t grow much. Amazon’s cloud arm, on the other hand, is where the profit story gets interesting: Martin said it’s growing around 40% at roughly 35% margins.
That’s the kind of mix shift investors love. More cloud, more margin, less “please enjoy our 1% retail margins and emotional support cardboard boxes.”
Big picture: Amazon isn’t just an e-commerce giant anymore. If this AI-and-cloud thesis keeps holding, it starts looking a lot more like a profit machine with a retail side quest.