These 3 names are beating Amazon Right Now...

AMZN sits on a 3-legged stool, driving revenue (primarily) from e-commerce, cloud computing, and digital advertising.

LikeFolio has special insights into two of its main segments: e-Commerce via its Prime service and cloud computing via AWS mentions.

Mentions show Amazon Prime interest is rising, logging double digit YoY growth: +19% YoY

AWS is showing signs of slower growth, but positive on a YoY basis: +3% YoY

Costco and Walmart Win Retail Shoppers

When comparing both of Amazon's key segments vs. peers, we note overperformance by Costco (COST) and Walmart (WMT) as consumers hunt for savings and value.

GOOGL Cloud Services Stealing Market Share from AWS, Microsoft

We also see market share gain on the cloud front by Google.

Last quarter AMZN exceeded expectations, significantly outperformed analyst predictions with a 14% increase in revenue to $170 billion and earnings of $1.00 per share, surpassing the expected 80 cents. The company provided an optimistic outlook for the first quarter of 2024, projecting revenues between $138 billion and $143.5 billion, which indicates an 8% to 13% growth. Shares popped +8% higher following the report.

Amazon Web Services (AWS) results were strong but slowing: AWS reported a revenue of $24.2 billion, matching forecasts and showing a 13% growth compared to the previous year, though growth has decelerated from 20% a year earlier. This matches what we are tracking on the mention front right now.

2 additional areas are showing strength for Amazon:

• Advertising: Amazon’s advertising business grew by 27% year-over-year to $14.7 billion. The introduction of ads on Prime Video is expected to further boost this revenue stream. If Netflix is any predictor of success, Ad revenue still has plenty of room to ramp up.

• Operational Efficiency: Under CEO Andy Jassy’s leadership, the company has focused on cost control, leading to a significant increase in net income to $10.6 billion from $278 million a year earlier. Amazon reduced its workforce by 27,000 employees and cut back on less successful projects, aiming to streamline operations.

Looking ahead: Leveraging AI: Amazon continues to invest in new areas, especially those that resonate with customers, such as generative AI technologies and new shopping features like the AI assistant Rufus.

AMZN shares are trading +80% higher YoY as the company logs continued growth and improved cost cutting measures. But LikeFolio data suggests some consumers may be looking elsewhere for services -- notably those hunting deals in a persistent inflationary environment.

At these levels we are neutral. We're not betting against Amazon, but are preparing for some conservative spending.

Instead, we've got these three over-achievers on our watchlist: GOOG, COST, WMT.

Macro trends appear to be shifting in their favor...