Amazon Draws Sell Rating as Capex Outruns 37% AWS Growth
Updated
Updated · Seeking Alpha · Aug 3
Amazon Draws Sell Rating as Capex Outruns 37% AWS Growth
1 articles · Updated · Seeking Alpha · Aug 3
Summary
Amazon was assigned a Sell view because rising capital spending and negative free cash flow are seen outweighing strong cloud demand and recent operating strength.
AWS net sales grew about 37% year over year and backlog climbed to roughly $496 billion, but capex and depreciation growth are running faster than overall revenue.
Q2 margin strength was described as flattered by one-off gains rather than a durable improvement, leaving concerns about AI economics and faster asset obsolescence.
The analyst put fair value below about $250 and said upside will stay limited until AWS revenue growth closes the gap with depreciation and amortization.