A for Amazon, K for Buying

All five FAANG stocks have now reported their results for the quarter — and Evercore is behind ISI’s Mark Mahaney, one of the worst-hit tech giants. That’s Amazon, which posted a loss of $2 billion overall for the quarter ended June. The company had lost $3.9 billion from its Rivian holdings.

Mahane, director of internet research at Evercore ISI, told CNBC’s “Squawk Box Asia” on Friday, “Amazon reported better-than-expected results for the June quarter and then issued guidance for the September quarter that was roughly in line with expectations. ” He stressed that given the risk of a global recession, Amazon may lower its forecasts.

Investors were encouraged by Amazon’s upbeat outlook, which indicated consumer demand was still resilient and came despite a deteriorating outlook for US consumer confidence. This made Mahaney optimistic that the worst is over for Amazon, as he says the company is “doing really well.” They anticipate accelerated sales growth and margin expansion in the second half of the year despite adverse inflationary conditions.

“They are bringing in really good product initiatives… they have accelerated delivery and increased their inventory. I think it increased customer satisfaction and Prime customers made more purchases,” he said, noting that The company has outperformed other retailers in this quarter.

Mahane also pointed to the continued growth of cloud computing service Amazon Web Services and its advertising business. “These are high-margin businesses that are growing faster than the core retail business, which will have an amazing impact on margins. This revenue is positive for high-margin, fast-growing businesses,” he said.

“I love Amazon and I think it can recover. There are a lot of things that haven’t recovered yet. Markets still haven’t fully recovered and international trade margins are still weak. I think That these will improve in the next 12 months. Fundamentals will improve so there is a lot of room for improvement in both the company and the stock.”