00:00 Julia
It’s so interesting to see Amazon come out with negative free cash flow and the stock go up after we saw Meta post, you know, lower free cash flow and after seeing Alphabet post negative free cash flow and both those stocks going down. As you think about that, what is the real difference between Amazon and the others?
00:31 Speaker B
So yeah, so so you know it Julia, it’s part of what makes our job exciting is that uh the same data point uh stocks react to it differently. And I think the reason that investors are applauding Amazon is the five consecutive quarters of accelerating revenue growth for AWS. What that means is that the 30% uh revenue growth for AWS in the June quarter was faster than the 20 something revenue growth in the March quarter. And what it means is that enterprises mostly uh can’t get enough AWS to uh dabble in AI. And I think that when Amazon says, hey, we’re going to increase our CAPEX outlook for this year to 220 from 200, even though that’s mostly on memory inflation, uh investors say, you know, clearly you’re getting a return on an investment spend. And that makes a lot of sense to me. Amazon has done an amazing job historically either under uh Jeff Bezos’s helm or now Andy Jessie’s on investing into cycles and knowing when to accelerate investment spending and also knowing when to decelerate. And clearly it’s worthwhile right now that they’re accelerating.
01:29 Julia
I mean, I was also struck, for example, meta saying like, we’ll have a Gentic at some point, but we don’t know what it’s going to look like and and Jessie saying like, we have an agentic product, this is what it is and here are our customers.
01:46 Speaker B
The thing that I’m thinking about there is why did they change the name to Alexa shopping from Rufus? So, so maybe this is just me. I spend way too much time thinking about Amazon. But if if they’re doing so well in a Gentic commerce and again, it’s very early days here, why were they so quick to pivot away from Rufus? Um I think the good news for Amazon is that a Gentic commerce may be one of many ways that consumers buy items, but not the primary or sole way in the future, because I do think that would be uh both a positive and a negative for Amazon, the negative being if consumers are engaging with a Gentic commerce to buy items away from Amazon.
