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Published on Oct 28, 2016
Amazon
must continue to invest to stay ahead of competitors for both its
online business and its cloud services business, according to Charlie
O'Shea, an analyst at Moody's. Amazon's earnings missed expectations,
which weighed on its stock. O'Shea said Amazon is a hard company to
benchmark on a quarterly basis, since it is investing for the future.
But he added that Amazon's competitors are upping their investments too.
O'Shea pointed out that when it comes to cloud services, both Microsoft
and Google are better capitalized. Meantime, in terms of its online
retail sales business, Amazon is battling with the brick and mortar
retailers to maintain market share against companies like Wal-Mart and
Target . O'Shea added that this will be a very competitive holiday
season for retailers overall, and Amazon may be forced to become more
promotional in order to keep against brick and mortar retailers. But
O'Shea is bullish on Amazon Prime, saying "it's a big deal." O'Shea said
content is key for Prime, and Amazon will continue to invest heavily in
that service. Looking forward, O'Shea thinks Amazon could surprise on
the upside in terms of its revenue growth target, projecting growth of
about 20% in the fourth quarter.
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