Tag Archives: Cloud computing

Fast delivery is very important to some e-commerce Giants

Amazon is expected to report earnings on Thursday 24 after market close, and the consensus EPS forecast for the quarter is $4,46, and that is below the reported earnings for the same quarter last year that came in at $5,75.

I have been watching Amazon for two decades and it`s a big surprice to see that the company is still interesting. The company has been growing since the late 90`s and have now become a huge conglomerate with many businesses on top of its core business.

Amazon increased the shipping cost but what happens when its drones are taking over?

Cloud computing is one of the biggest winners at the conglomerate at the moment, and that`s also one of the biggest reasons why investors are holding their shares. It`s not their e-commerce business I`m looking at right now. It`s simply AWS (Amazon Web Services).

AWS made up about two-thirds of Amazon`s operating income last quarter. 13% of Amazon`s revenue comes from AWS. This is one of the most interesting part of the conglomerate with its great business model.

AWS grew 49% in the same quarter last year, and last quarter AWS reported a 37% growth and that is still a very great number. But it costs. Last quarter, Amazon reported that they had invested heavily in AWS.

Amazon added more personnel to the marketing team as well as the AWS`s technical team. Money makes money, and these investments should pay off in the long run.

Amazon have big competitors out there and one of the biggest are Rakuten in Japan and Alibaba in China. I receive many packages from them all and free and fast delivery is critical important to them all.

Jeff Bezos knows it and that`s why they now are in direct competition with FedEx and UPS to name a few. Amazon have recently started to ship third-party goods through its own logistics system, and that`s probably why FedEx made a decision to cut ties with them. This is probably why FedEx also reported negative results in its recent earnings.

According to Rakuten, Amazon has gone from shipping 15% of its own packages in 2017 to 50% today. Will they continue to ship its own packages through its own logistics system, and what is the percentage?

The shipping cost accelerated and can increase. On top of that Amazon still have its one-day shipping strategy which is a strategy not all of the e-commerce giants can follow up. I receive many packages from Ebay and sometimes it can take weeks and months to see the item arrive. But they have a different strategy.

Investors should look at it in the long run and keep in mind that the shipping cost can drop when the drones are coming to play the game. But it remain to see when that is happening.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The public cloud market is expected to reach $411 Billion by 2020 and one of the fastest growing cloud provider in the world is Alibaba

Alibaba Group Holding Limited has declined since March this year after recent trade war fears. It`s not fair if you look at the numbers. The company boasted a five-year CAGR of over 40 percent, and their revenue is primarily driven by core e-commerce.

Alibaba`s Market cap is $464,72 Billion, and that valuation is good if you look at their potential for growth like cloud computing which is growing fast. They are also expanding in the Indian market with good help from Softbank.

Softbank has already acquired many important startup companies in India, and India will be one of the most important markets for Alibaba in the future. Alibaba and their ally Softbank will therefore build its business on companies that is already operating in the Indian market instead of doing it all from scratch.

The online retail market in India is growing fast and Alibaba can grow in this sector despite the fact that they are late into the market. Alibaba led a funding round of $300 million in online grocer Big Basket at a valuation of $950 million.

But they have competitors. Amazon will invest over $5 Billion in Amazon India, and Valmart wants to buy about 80 percent stake in Flipkart. Valmart is willing to pay about $12 Billion. Alibaba will also earn from Softbank`s investment in rival online grocer Grofers.

Alibaba`s core commerce segment comprises marketplaces operating in retail and wholesale commerce in China, and international commerce. The Cloud computing segment, which comprises Alibaba Cloud offering a complete suite of cloud services, is in top gear.

Cloud computing is good for Alibaba as more and more businesses are shifting their servers and broadband subscriptions to cloud computing technology in order to streamline costs.

The public cloud market is expected to reach $411 Billion by 2020, and Alibaba with its ongoing initiatives is well posed to grab the growth opportunity. I have a good reason to belive that cloud computing will be one of Alibaba`s major growth drivers in the future.

Alibaba has expanded overseas to Singapore, Malaysia, Indonesia, Frankfurt, London, Paris, New York, San Mateo, Dubai, Seoul, Tokyo and Sydney. So far, they have more than 2,3 million customers worldwide.

In the last report, cloud computing segment increased 104 percent to US$553 million, and revenues from its core commerce segment were up 57 percent YoY to US$11,3 Billion.

Alibaba is probably the most shorted stock in the world in recent weeks after trade war fears, but their opportunity for further growth will probably exceed investors expectations. If so, Alibaba`s shares can easily jump to next target; $200.

Alibaba Group Holding Limited is expected to report earnings on May 4 before market open. The report will be for the fiscal Quarter ending March 2018. Earnings forecast for the quarter is $0,7 which is well below earnings for the same quarter last year of $0,39. Last quarter, Alibaba delivered a negative earnings surprise of 1,21 percent.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Amazon are fighting with Netflix and YouTube

Amazon continue to rise up and the average 12-month price target is about $750, which means the company has the potential to jump another 20%. Not a surprise for bullish investors were about 90% is bullish on that stock.

The e-commerce giant will post first quarter earnings on Thursday 28 April after market close, and it`s expected to post EPS of $0,64 on $28 billion in revenue which is three cents higher than Wall Street on the bottom line and around $60 million higher on top.

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Since the start of the quarter, estimates have fallen 6% for EPS but increased 2% for revenue. Despite the decline estimates, profits are anticipated to increase and so are revenue. Amazon have been posting losses, ut is coming off three straight quarters of profitability.

Amazon Prime and the dominance of Amazon Web Services (AWS) is expected to carry the retailer this year. They have doubled it membership in Amazon Prime for the past two years, and that is up 54 million, and almost half of all adults in the U.S have Prime subscriptions.

AWS is the leading in the cloud infrastructure industry, representing about 30% of the market, and large enterprises such as Netflix have migrated to AWS to be its platform provider which validates their credibility and reliability.

A study showed that Amazon had a better catalogue of Prime Video movies on TV shows compared to Netflix. According to Barclays, Netflix`s overall catalog has experienced a slide of up to 28% over the past year.

Mark Fahey revealed that Amazon offered a better deal in terms of amount and quality of video streaming compare to Netflix. Additionally, it had more titles with high ratings from users, and quality is of more importance than quantity.

Having a platform with a great library is not enough while quality that is offering constantly refreshed content will be vital in the future. it`s a shift from licensing non-exclusive content to original series and movies that one can get anywhere else.

Netflix has a budget of $5 billion on content in 2016 and that number will rise to about $6 billion in 2017. That doesn`t mean the entertainment value will increase. While Amazon and Netflix are fighting we can see a third player in this game, and that is YouTube with its amazing content.

Amazon has expanded its web services in five new regions this year, including China, India, and the U.K. Heavy investments in global expansion on top of Google and Microsofts ascension in cloud computing will put pressure on Amazons margins.

Expected growth in cloud computing and IoT should make a great outlook for Amazon as they continue to expand their web services.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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