- AMZN delivered its 4th quarterly loss in two years, well below both guidance and consensus, driven by massive investment in new content, devices, and services, and promised bigger losses next Q.
- Sales were characteristically strong, up 23% YoY, but opex was up even more at 24%. As usual, management is offering no specific detail on the drivers of either sales or expenses.
- AMZN is launching a smartphone, a set top box, streaming music, and an e-book subscription service. It is rolling out same day and grocery delivery. It is expanding AWS and int’l operations.
- AMZN has a big lead in pursuing massive market opportunities. These huge investments will likely prove worthy with time, but Bezos may need to let up to avoid further bleeding in future quarters.
Amazon is a maddening company. It has the inside track on an e-commerce opportunity that addresses tens of TRILLIONS of dollars in global retail and wholesale sales. Against that opportunity, it is building an enormous moat of scale economies and logistic capabilities that may be impossible for future would-be rivals to counter. It is also furiously building scale to sustain its first move advantage in commercial cloud data center hosting, a business that itself targets TRILLIONS of dollars in enterprise IT spending. It is playing a high stakes competitive game and it is winning. So much for the good news.