Amazon Likely Won't Participate In AI Hype, 3 Reasons

Seeking Alpha2023-05-31

SummaryAmazon.com, Inc. is not a growth company anymore but is still priced as a growth story.While artificial intelligence has potential benefits for ecommerce companies, it is uncertain how it will ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

Danchen
2023-11-15
Danchen
Amzn is very much participating in the AI growth story. Ignore at your own risk :)
Danchen
2023-05-31
Danchen
What a silly commentary. On the contrary, AMZN launched 'Bedrock' and 'Titan' AI products.

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2339686231?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2023-05-31 10:25","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2339686231","market":"us","top_or_hot":-1,"title":"Amazon Likely Won't Participate In AI Hype, 3 Reasons","media":"Seeking Alpha","content":"<div>\n<p>SummaryAmazon.com, Inc. is not a growth company anymore but is still priced as a growth story.While artificial intelligence has potential benefits for ecommerce companies, it is uncertain how it will ...</p>\n\n<a href=\"https://seekingalpha.com/article/4608297-amazon-likely-wont-participate-in-ai-hype-3-reasons\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Amazon Likely Won't Participate In AI Hype, 3 Reasons</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAmazon Likely Won't Participate In AI Hype, 3 Reasons\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-05-31 10:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4608297-amazon-likely-wont-participate-in-ai-hype-3-reasons><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAmazon.com, Inc. is not a growth company anymore but is still priced as a growth story.While artificial intelligence has potential benefits for ecommerce companies, it is uncertain how it will ...</p>\n\n<a href=\"https://seekingalpha.com/article/4608297-amazon-likely-wont-participate-in-ai-hype-3-reasons\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00BFSS8Q28.SGD","symbol_name":"Janus Henderson Balanced A Inc SGD-H","start_time":0,"source_url":"https://seekingalpha.com/article/4608297-amazon-likely-wont-participate-in-ai-hype-3-reasons","article_id":"2339686231","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2339686231","pubTimestamp":1685499900,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SummaryAmazon.com, Inc. is not a growth company anymore but is still priced as a growth story.While ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","LU0149725797.USD":"汇丰美国股市经济规模基金","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","SG9999014906.USD":"大华全球优质成长基金Acc USD","LU0882574139.USD":"富达环球消费行业基金A ACC","LU0289941410.SGD":"AB FCP I Dynamic Diversified AX SGD","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","SG9999014914.USD":"UNITED GLOBAL QUALITY GROWTH (USDHDG) INC","SG9999018865.SGD":"United Global Quality Growth Fd Cl Dist SGD-H","BK4534":"瑞士信贷持仓","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0109391861.USD":"富兰克林美国机遇基金A Acc","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","BK4587":"ChatGPT概念","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","SG9999001077.SGD":"United International Growth Fund SGD","LU2237443382.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","BK4535":"淡马锡持仓","LU0861579265.USD":"联博低波幅策略股票基金A","LU0061474960.USD":"天利环球焦点基金AU Acc","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","BK4538":"云计算","AMZN":"亚马逊","BK4588":"碎股","LU1691799644.USD":"Amundi Funds Polen Capital Global Growth A2 (C) USD","LU2237443978.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc SGD-H","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","LU0109392836.USD":"富兰克林科技股A","LU0310799852.SGD":"FTIF - Templeton Global Equity Income A MDIS SGD","BK4503":"景林资产持仓","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4551":"寇图资本持仓","BK4561":"索罗斯持仓","BK4573":"虚拟现实","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC"},"translate_title":"亚马逊可能不会参与人工智能炒作，3个原因","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMZN":0.9},"content_text":"SummaryAmazon.com, Inc. is not a growth company anymore but is still priced as a growth story.While artificial intelligence has potential benefits for ecommerce companies, it is uncertain how it will impact Amazon's future, and the hype surrounding AI should be examined critically.Investors are overly optimistic about Amazon's AI prospects, overlooking crucial aspects such as declining growth rates, and the challenge of finding a significant revenue stream in AI.Valuation is a crucial factor, and at more than 45x its 2024 EPS, Amazon's stock appears overpriced considering its growth rate.Success in investing lies in buying stocks below intrinsic value, a criterion that Amazon doesn't meet right now.fabioderbyInvestment ThesisI argue that investors should not chase Amazon.com, Inc. (NASDAQ:AMZN).In this analysis, I lay out 3 reasons, with 3 arguments in each section, as to why Amazon is not likely to benefit from the AI hype.At the core of my argument is the fact that Amazon is not a growth company any longer and that it's still priced as a growth story.This doesn't provide investors with the right setup to benefit from this investment at the current valuation - even if the share price is rallying hard on the back of Wall Street's AI-fever.AI is A Game ChangerHere are three aspects where AI will benefit commerce companies:Companies can deploy AI to analyze vast amounts of customer data to personalize recommendations.AI can automate repetitive tasks and streamline supply chain operations.AI can optimize inventory management and reduce operational costs by providing real-time customer support (think chatbots).How will AI impact Amazon? As Niels Bohr said, it is difficult to make predictions, especially about the future.For now, there's just so much excitement about AI. But let's attempt to move beyond the hype and the alluring narrative, to look into Amazon's fundamentals.Why Investors Are Getting Too Bullish on Amazon's AI ProspectsHere are three crucial aspects of why investors are getting too bullish on Amazon's AI prospects.AMZN revenue growth ratesIn the first instance, it's important to keep in mind that Amazon's growth rates are now reporting meaningfully less than 20% CAGR. In fact, the guidance for Q2 2023 is up against relatively easy comparables, and at the high end Amazon is guided for around 10%. Even if Amazon ends up growing by 12% CAGR, I believe that in H2 2023 its growth rates will not move higher than 12% CAGR.Secondly, by the end of 2023, Amazon's retail operations will generate $500 billion in revenues. That comes from selling merchandise. To find a needle-moving revenue stream in AI that will be significant enough to meaningfully change the direction of its core business will be quite a stretch.AMZN Q1 2023Particularly, when we consider that even today Amazon's International segment is still a money-losing operation. Meaning that outside of North America, after years upon years of investing in its International segment, Amazon still hasn't figured out a way to be profitable.And thirdly, Amazon succeeded with Amazon Web Services, or AWS, because it was years ahead of anyone else in figuring out the need for storage. Indeed, I'm confident that I don't need to remind anyone of Warren Buffett's quote on AWS. Can the objective Amazon shareholder say that the same applies here? I believe that Amazon was caught just as flatfooted on AI as Alphabet Inc. (GOOGL, GOOG) aka Google. Or perhaps even more flatfooted.Valuation Still MattersHere are 3 quick summaries of bubbles that happened in the past 10 years:The housing bubble of the early 2000s. Home prices soared driven by speculation on the belief that housing prices would continue to rise indefinitely.3D printing of 2013-2014 (although this one repeats every so many years)The cannabis bubble, as the legalization of cannabis gained momentum drew significant investor attention.I've not included cryptocurrency because that's more nuanced. Even though most cryptocurrencies have died OUT, some are still thriving. My point here is that on every occurrence, investors honestly believed that this time was different. It always starts off with a half-truth. And as they say, a half-truth is more dangerous than a lie.As we look out to 2024, investors are being asked to pay more than 45x forward EPS. And I know the refrain very well, that Amazon isn't priced on earnings, because its investing for growth.However, on that basis, I question, where's the growth? Because from what I see, the stock is growing at less than 15% CAGR.The Bottom LineThe only thing we know about the future is that it will be different. (Peter Drucker.)The reason why Warren Buffett succeeds in investing is not because he is able to predict the future better than anyone. Making predictions about the future is not the way to compound wealth. The way to compound wealth is to buy stocks that are selling for less than intrinsic value.I don't believe that Amazon.com, Inc. stock is being priced for less than intrinsic value. And even if right now the share price appears to be smiling away, we both know from a look back to 2022 that the Amazon.com, Inc. share price is not immune to selling off.This article is written by Michael Wiggins De Oliveira for reference only. Please note the risks.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":241475285537032,"gmtCreate":1699982335626,"gmtModify":1699982340056,"author":{"id":"3583115060100319","authorId":"3583115060100319","name":"Danchen","avatar":"https://static.tigerbbs.com/caae1f818e00264c55c27451689918ef","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":3,"crmLevelSwitch":0},"htmlText":"Amzn is very much participating in the AI growth story. Ignore at your own risk :)","listText":"Amzn is very much participating in the AI growth story. Ignore at your own risk :)","text":"Amzn is very much participating in the AI growth story. Ignore at your own risk :)","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/241475285537032","repostId":2339686231,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":182243574116448,"gmtCreate":1685502135457,"gmtModify":1685502274136,"author":{"id":"3583115060100319","authorId":"3583115060100319","name":"Danchen","avatar":"https://static.tigerbbs.com/caae1f818e00264c55c27451689918ef","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":3,"crmLevelSwitch":0},"htmlText":"What a silly commentary. On the contrary, AMZN launched 'Bedrock' and 'Titan' AI products.","listText":"What a silly commentary. On the contrary, AMZN launched 'Bedrock' and 'Titan' AI products.","text":"What a silly commentary. On the contrary, AMZN launched 'Bedrock' and 'Titan' AI products.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/182243574116448","repostId":2339686231,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":16,"commentSize":2,"repostSize":2,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2339686231"}