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Speaker 2: So this is for the fourth quarter.
Speaker 3: The look back, we are looking at EPs a dollar
Speaker 3: ninety five a share.
Speaker 2: That's a penny light from what the street was expecting.
Speaker 3: Fourth quarter operating margin that came in smack in line
Speaker 3: with what the street was forecasting eleven point seven percent.
Speaker 3: Here's to the outlook. Amazon ce's first quarter net sales
Speaker 3: one hundred and seventy three point five billion to one
Speaker 3: hundred and seventy eight point five billion. The estimate on
Speaker 3: the street kind of in the middle of that one
Speaker 3: hundred and seventy five point fifty four billion, So maybe
Speaker 3: potentially it could be below that based on that range.
Speaker 3: Taking a look at shares of Amazon low in the aftermarket.
Speaker 1: Done by about four point four percent, now three point
Speaker 1: nine percent, bouncing around a little bit, but still lower
Speaker 1: by two and a half percent.
Speaker 3: Now, yeah, they are definitely bouncing around. So let's see,
Speaker 3: let's go through some more than numbers.
Speaker 1: Yeah, the one that you hit that really sticks out, Carol,
Speaker 1: is first quarter net sales. That outlook sees net sales
Speaker 1: one seventy three and a half to one seventy eight
Speaker 1: and a half billion dollars. That's within estimates of one
Speaker 1: hundred and seventy five point five to four billion. Amazon
Speaker 1: ce's first quarter operating income coming in. This is really light,
Speaker 1: sixteen and a half billion to twenty one and a
Speaker 1: half billion. The estimate was for twenty two point twenty
Speaker 1: four billion dollars, so profit expected to take a hit,
Speaker 1: at least not looking like what analysts wanted to see. Again,
Speaker 1: twenty two point two four billion is what analysts wanted
Speaker 1: to see. First quarter operating income set to look sixteen
Speaker 1: and a half to twenty one point five billion dollar.
Speaker 2: All right, let's continue with the look back there.
Speaker 3: Fourth quarter North America net sales one hundred and twenty
Speaker 3: seven point zero eight billion. The estimate was slightly above
Speaker 3: that at one twenty seven point twenty one billion.
Speaker 1: You've seen this capex number. Now we're getting the good stuff.
Speaker 1: Twenty twenty six capecks about two hundred billion dollars. That
Speaker 1: way exceeds estimates. That estimate was for one hundred and
Speaker 1: forty six point one one billion dollars shares moving lower
Speaker 1: in the after hours, now down by about seven percent
Speaker 1: eight percent.
Speaker 2: All right, so we are seeing some pressure here. Hey,
Speaker 2: let's go through. There's more results.
Speaker 3: As we mentioned, net sales two hundred and thirteen point
Speaker 3: thirty nine billion for the fourth quarter. The estimate on
Speaker 3: the street was two hundred and eleven point forty nine
Speaker 3: billion according to Bloomberg consensus.
Speaker 2: Physical stores.
Speaker 3: Let's actually go to online stores net sales eighty two
Speaker 3: point ninety nine billion. That's pretty much what the street
Speaker 3: was expecting. The estimate was for eighty two point three
Speaker 3: billion dollars. AWS net sales thirty five point fifty eight
Speaker 3: billion was the quarterly results for the fourth quarter. Estimate
Speaker 3: was for thirty four point eighty eight billion dollars, so
Speaker 3: a little bit better than what the street was expecting.
Speaker 2: And let's go to we saw the EPs. That was
Speaker 2: a penny light. Where else do you want to go?
Speaker 1: I want to go to some commentary Amazon. I'm looking
Speaker 1: through the press release, sees twenty twenty six capex again
Speaker 1: two hundred billion, estimates of one hundred and forty six
Speaker 1: point one one billion. That's the headline. That's the story.
Speaker 1: We're going to stick to that one. Throughout the program,
Speaker 1: we are going to get additional details. For example, Amazon
Speaker 1: saying that demand is strong for AI, for chips, robotics,
Speaker 1: saying strong demand for its existing offerings. I'm looking through
Speaker 1: the press release, right, Can I just say, please God.
Speaker 3: That strong is demand for their shares? Because that's doc
Speaker 3: Right now. Amazon shares are down about nine percent tim
Speaker 3: in the aftermarket.
Speaker 1: The company is saying that aws growing twenty four percent,
Speaker 1: our fastest growth in thirteen quarters, Advertising growing twenty two percent,
Speaker 1: stores growing briskly across North America, International chips business growing
Speaker 1: triple digit percentages year over year. This growth is happening
Speaker 1: because we're continuing to innovate at a rapid pace and
Speaker 1: identify and knockdown customer problems. This is a quote from
Speaker 1: Andy Jasse, President and CEO of the company. He says, quote,
Speaker 1: with such strong demand for our existing offerings and seminal
Speaker 1: opportunities like AI, chips robotics, and low Earth orbit satellites,
Speaker 1: we expect to invest about two hundred billion dollars and
Speaker 1: capital expenditures across Amazon in twenty twenty six and anticipate
Speaker 1: strong long term return on invested capital. That two hundred
Speaker 1: billion dollars is not what investors were expecting. Again, investors
Speaker 1: were expecting one hundred and forty six point one to
Speaker 1: one billion dollars. That is a huge increase from those expectations.
Speaker 3: Yeah, right now, shares of Amazon, they're down about ten
Speaker 3: almost eleven percent here in the aftermarket. So that capex line,
Speaker 3: just like we saw play out with Alphabet last night,
Speaker 3: a bit of a shocker, and certainly initially we have
Speaker 3: investors not liking that number. So again Amazons seeking now
Speaker 3: eleven percent on that higher than expected twenty twenty six
Speaker 3: capex for cast. We also mentioned that companies forecast for
Speaker 3: the first quarter in terms of net sales one hundred
Speaker 3: and seventy three point five to one hundred and seventy
Speaker 3: eight point five billion. Street estimate was for one hundred
Speaker 3: and seventy five point fifty four billion. So maybe a
Speaker 3: combination of potentially a lower mark when it comes to
Speaker 3: first order net sales along with that higher capex certainly
Speaker 3: creating some stress in terms of investors. The share price
Speaker 3: now down about ten percent tim in the aftermarket.
Speaker 1: Looking through other highlights. I mean, this is a very
Speaker 1: long press release that goes through what the company has
Speaker 1: done over the last quarter, new agentic capabilities in aws Transform,
Speaker 1: new Agentic AI capabilities for Amazon Connected. It's an AI
Speaker 1: tool that the company says enables contact centers to provide consistent,
Speaker 1: personalized customer service experiences. AWSAI factories fastest speeds ever for
Speaker 1: Prime members globally in twenty twenty five shares, though still
Speaker 1: taking a hit in the after hours, down more than
Speaker 1: ten percent.
Speaker 3: I also want to point out, in terms of the
Speaker 3: guidance that we're getting from Amazon, they are saying that
Speaker 3: the Amazon guidance assumes no additional restructurings.
Speaker 2: Those restructurings, I.
Speaker 3: Guess you could go as far as to say whether
Speaker 3: or not there's more layoffs. Keep in mind, we just
Speaker 3: heard at the end of January, right that this company's
Speaker 3: cutting sixteen thousand corporate jobs worldwide in an effort to
Speaker 3: remove layers of bureaucracy and increase ownership. So we saw
Speaker 3: this company, I'm certainly announcing some movements.
Speaker 2: Some restructuring.
Speaker 3: So we'll have to get some more clarity about what
Speaker 3: that means, what possible additional restructurings could be coming.
Speaker 2: We'll look for that on the call.
Speaker 1: Yeah, just looking at some updates here twenty twenty six CAPEX. Again,
Speaker 1: this is the story here. This is the headline. Two
Speaker 1: hundred billion dollars above the average estimate of one hundred
Speaker 1: and forty six point one one billion dollars.
Speaker 2: All right, let's get to it. Punam goils with us.
Speaker 3: She's senior analyst for e commerce and at leisure for
Speaker 3: Bloomberg Intelligence. She joins US for BI headquarters out there
Speaker 3: in Prince.
Speaker 2: Of New Jersey.
Speaker 3: Punham investors not loving it. Is it all about that
Speaker 3: CAPEX number?
Speaker 4: You know it is? But I think the CAPEC summer
Speaker 4: is fine. We were looking for one hundred and forty
Speaker 4: billion dollars. Two hundred billion dollars just continues to show
Speaker 4: that they're investing.
Speaker 1: And I think, wait, that's sixty billion dollars more.
Speaker 2: That's a lot of money.
Speaker 4: So yes, but they need to invest, right. We know
Speaker 4: that Amazon has to continue to invest in cloud services,
Speaker 4: it needs to invest in AI. So there's a lot
Speaker 4: of ketchup that needs to be done here. I think
Speaker 4: the long run narrative here is still good. The underlying
Speaker 4: results were solid across both a WUS and retail.
Speaker 3: Interesting and so even though they talked about seeing first
Speaker 3: quarter net sales one hundred and seventy three point five billion.
Speaker 3: Tw one hundred and seventy eight point five billion Street
Speaker 3: estimate is kind of in the middle of that one
Speaker 3: seventy five point fifty four.
Speaker 2: That's okay, Yeah, that's okay.
Speaker 4: Like the results are good to okay. I think the
Speaker 4: numbers show that Amazon continues to plug away across its
Speaker 4: businesses and it is making progress. And I mean, we're
Speaker 4: happy with those numbers. We think it's making the right investments,
Speaker 4: we think it's moving in the right direction, and we
Speaker 4: think it's growing profitably. The North America profit margins were
Speaker 4: better than expected, and aws A thirty five percent is
Speaker 4: still respectable.
Speaker 2: Okay.
Speaker 1: So if we're if we're not too concerned about the
Speaker 1: capex here, why are we seeing investors react like this,
Speaker 1: down as much as ten percent in the after hours,
Speaker 1: down as much as eleven percent in the afternoon.
Speaker 4: I think, I think we'll have to see what they
Speaker 4: say on the call on where this capex is exactly going,
Speaker 4: what the backlog looks like. I think the call will
Speaker 4: give us a little more insight onto where they are investing,
Speaker 4: and they'll be important. But I think, you know, expecting
Speaker 4: higher Capex, and what we had thought yesterday, especially after
Speaker 4: Alphabet's result, was what we were kind of expecting.
Speaker 1: So the reason Carol and I are like fighting to
Speaker 1: get to ask you this question because maybe we're maybe
Speaker 1: we're going to the same place. So Andy Jasse in
Speaker 1: his press release, in his comments, actually has two sentences here,
Speaker 1: and one of them does mention the two hundred billion
Speaker 1: dollars in Capex, but he says there are seminal opportunities
Speaker 1: like AI chips, robotics, and low Earth orbit satellites. Therefore,
Speaker 1: we expect to invest about two hundred million dollars in
Speaker 1: Capex across Amazon in twenty twenty six. Of those AI chips, robotics,
Speaker 1: low Earth orbit satellites, where do investors want to see
Speaker 1: the investment? Would they rather see them in AI and
Speaker 1: Chip than in lower orbit satellites. I mean, SpaceX kind
Speaker 1: of owns that I.
Speaker 4: Would agree with you there. I would like to see
Speaker 4: more on their core business rather than innciliary businesses.
Speaker 3: So one of the things that caught my attention, I'm
Speaker 3: thinking about, you know, the jobs that they are already cutting,
Speaker 3: those corporate jobs. We got that late January Punam Amazon
Speaker 3: saying guidance that they put out assumes no additional restructurings.
Speaker 2: How do you what you read on that is? Is
Speaker 2: it yeah?
Speaker 3: I'm just curious, is it more job cuts other shifts?
Speaker 3: How what's our takeaway there?
Speaker 4: I think you'll continue to see job cuts. I don't
Speaker 4: think we're over. You know, they've highlighted it pretty clearly
Speaker 4: in their shareholder letter last year that AI is going
Speaker 4: to allow them to pair back on jobs, especially when
Speaker 4: it comes to some of those jobs that can be
Speaker 4: automated in the distribution centers and the logistics and in
Speaker 4: the technology workspace. So I don't think it's over. I
Speaker 4: think there's more to come. But I do think that
Speaker 4: they started and they're continuing to just push through what
Speaker 4: their original plans were for now.
Speaker 3: In terms of operating margin, eleven point seven percent, so
Speaker 3: that was bang in line with what the street was expecting.
Speaker 3: They're managing costs, they're getting ahead of things there. That
Speaker 3: was a good thing to see that they kept that margin.
Speaker 4: Yeah, it was actually really good. In fact, when I
Speaker 4: look at the margin composition and I look at the
Speaker 4: North America operating profit margin, which is largely retail, that
Speaker 4: was slightly ahead of expectations at nine percent, so that
Speaker 4: was encouraging to see their international margins that were okay
Speaker 4: and AWS once again, that's really where you get the
Speaker 4: margin from. Thirty five percent was right in line with expectations.
Speaker 4: So I really think the quarter was in line to
Speaker 4: slightly better. From an operating fundamental standpoint. I think capecs
Speaker 4: obviously higher. We want to see where that investment is going,
Speaker 4: but hopefully they're making the investments and where they need
Speaker 4: to grow both the AWS and the retail business.
Speaker 3: All right, just to recap, we've got shairs of Amazon
Speaker 3: pairing their decline a little bit. The stock has been
Speaker 3: down as much as eleven percent post market right now
Speaker 3: down about seven and a half percent. Here again some
Speaker 3: of the headlines that we have highlighted on the Bloomberg.
Speaker 3: The company says twenty twenty six CAPECK about two hundred billion.
Speaker 3: The street estimate was one hundred and forty six point
Speaker 3: eleven billion. Sees first quarter net sales. We've talked about
Speaker 3: this range one hundred and seventy three point five billion,
Speaker 3: two hundred and seventy eight point five billion. Street estimate
Speaker 3: is one hundred and seventy five point fifty four billion.
Speaker 2: What else are you looking for?
Speaker 3: I mean, obviously more clarity in terms of what we'll
Speaker 3: get on the club call, but there's you know, we
Speaker 3: were talking to Spencer Soper early and he's like, there's
Speaker 3: just so much that comes out when you're dealing with Amazon.
Speaker 3: What other clarity are you looking for from this company
Speaker 3: or what are their aspects?
Speaker 4: Sure? I guess number one, we discussed the capex where
Speaker 4: it's going. Number two the backlog on AWS. I think
Speaker 4: that would be an interesting point to look at. And
Speaker 4: on the retail side, they're doing a lot, whether it's Rufus,
Speaker 4: whether it's Alexa plus. I'd love to hear how they're
Speaker 4: integrating AI into the workflow for consumers to just make
Speaker 4: that conversion much easier. And then what they're doing with
Speaker 4: open AI right, we don't know. There was news earlier
Speaker 4: about a ten billion dollar potential investment. What does that mean?
Speaker 4: Where is that going? What does it do for Amazon?
Speaker 4: What is the actual end result here from that investment?
Speaker 1: What about advertising? The company calling out advertising growing twenty
Speaker 1: two percent? Are we looking at that growth? Are we
Speaker 1: giving that enough credit?
Speaker 4: I don't know if we're giving it enough credit, But
Speaker 4: what I would say is it's still you know, twenty
Speaker 4: percent plus growth is admirable for Amazon. We think that
Speaker 4: advertising is a segment that sometimes overlooked as we get
Speaker 4: kind of caught up into AWS. I'd just say that
Speaker 4: for US, advertising is very important because it helps funnel
Speaker 4: the retail business. It's where you get the money to
Speaker 4: fund the retail business and the growth that you're having
Speaker 4: its pursue, especially when it comes to physical stores is
Speaker 4: groc free, its high profit margin, higher than the cloud business.
Speaker 4: So clearly a very important vehicle for them as they
Speaker 4: move forward.
Speaker 1: Where are the opportunities for advertising?
Speaker 4: I mean, I.
Speaker 1: Finally did it. I said, yes, three dollars a month
Speaker 1: because we want to watch The Night Manager without any ads.
Speaker 1: Those ads were really annoying me, and I did it.
Speaker 1: So I guess I'm part of the problem, or I
Speaker 1: guess for Amazon, part of the solution. But where's the growth?
Speaker 4: But there's just so much more, right if you think
Speaker 4: about the retail platform, there's a lot of advertisement done
Speaker 4: just on the e commerce aspect of the business. When
Speaker 4: you have Alexa plus, when you have Rufus, you know
Speaker 4: they're embedding advertisement in all sorts of ways. On the
Speaker 4: media side, yes, you're one of the few people that is,
Speaker 4: you know, opting out for those ads, but there are
Speaker 4: still millions of people who want it ad free. And therefore,
Speaker 4: you know, as they increase content, especially and now they're
Speaker 4: increasing content using AI to help facilitate even faster content,
Speaker 4: there's just so much opportunity for advertising.
Speaker 2: Still listen.
Speaker 3: I know this isn't your Baillywick, but I just think
Speaker 3: about Microsoft Alphabet, like all of these these hyperscalers, you know,
Speaker 3: when it comes to the cloud and the AI spend.
Speaker 3: Is there a takeaway for you on all of this
Speaker 3: as you kind of watch these numbers that have come
Speaker 3: out over the last week or so.
Speaker 2: And Alphabet, of course was just last night.
Speaker 4: Yeah. I think the big question that I'm hearing everyone
Speaker 4: ask is we continue to spend all this money, but
Speaker 4: what is the ROI on this capax? How do we
Speaker 4: kind of identify what the return is on the incremental
Speaker 4: investments that they're making, whether it's in chips, whether it's
Speaker 4: in other parts of the businesses. Help us like understand
Speaker 4: how to kind of gauge that impact.
Speaker 3: All right, great stuff as always covered it all, Punham,
Speaker 3: Thank you, thank you. We'll be looking for your research
Speaker 3: I know you're going to be working on it later on.
Speaker 3: It'll be on the Bloomberg Punham Goyle. She's senior analysts
Speaker 3: for e commerce and ath Leisure for Bloomberg Intelligence out
Speaker 3: there at BI headquarters in Princeton, New Jersey.
Speaker 2: We're not done. We're going to stay on Amazon because
Speaker 2: we continue to see this stock. It's off its lows.
Speaker 3: It was down as much as eleven percent here in
Speaker 3: the aftermarket. Now Tim just down about seven percent.
Speaker 1: I want to bring in James Chalkmock, partner and chief
Speaker 1: investment officer at Clockwise Capital. Have got about seventy million
Speaker 1: in assets under management. Also, they've got the Clockwise US
Speaker 1: Core equ ETF ticker is TIM and Amazon is the
Speaker 1: third biggest holding in the fund, more than five percent
Speaker 1: of the fund. James, with shares down seven and a
Speaker 1: half percent, are you buying more tomorrow?
Speaker 5: I don't think we'll be increasing our positions on increasing
Speaker 5: the size of any of our positions at this juncture.
Speaker 5: With the exception of the semiconductor space, you know, we
Speaker 5: see that the CAPEX numbers continue to come in ahead
Speaker 5: of expectations across all the hyperscalers, and we think you
Speaker 5: just have to follow the money in this market, and
Speaker 5: you know we're equal weight roughly with the index with
Speaker 5: respect to Amazon. See no urgency in the grossing of
Speaker 5: Amazon or any other of the megacap names.
Speaker 1: Are you concerned about the two hundred billion dollars that
Speaker 1: Amazon will spend this year?
Speaker 5: Obviously it's a concern for them and for everybody else.
Speaker 5: I mean, we're living in a world now, in a
Speaker 5: market now where you know, earnings, free cash flow, return
Speaker 5: on spend, all those things are important again. You know,
Speaker 5: just a couple of quarters ago you couldn't spend enough
Speaker 5: and be rewarded for it. And now you know there's
Speaker 5: the market's kind of getting religion again as it relates
Speaker 5: to you know, the financial performance and the financial expectations
Speaker 5: and projections for these companies. And you know it was
Speaker 5: bound to become relevant again at some point, and you
Speaker 5: know it really started last quarter with broad cop in
Speaker 5: the in the month of December, and now you're seeing
Speaker 5: it percolaid across all the companies reporting in January February.
Speaker 3: I want to ask you about what the details are
Speaker 3: that matter, And I'm looking at some other highlights from
Speaker 3: the press release from the last earnings they announced this is.
Speaker 3: Some of the highlights since the company's last earnings announcement
Speaker 3: include that Amazon announced new AWS agreements with Open Ai, Visa,
Speaker 3: the NBA, black Rock, Perplexity, Lift, United Airlines, Door, Dash, Salesforce,
Speaker 3: US air Force, Adobe, Thompson, Reuters, AT and T, S
Speaker 3: and P Global, National Bank of Canada, London Stock Exchange, Group,
Speaker 3: Choice Hotels, Accenture, Indeed, HSBC.
Speaker 2: CrowdStrike, and more.
Speaker 3: The reason I went through the list is because I
Speaker 3: feel like we have this question. Is it just about
Speaker 3: the hyperscaler spending and building out, but what we're increasingly
Speaker 3: seeing right is more businesses tap into this.
Speaker 2: Can we make the assumption at this point, James.
Speaker 3: That these are businesses that are going to continue to
Speaker 3: have to spend with an Amazon, or for that matter,
Speaker 3: with an alphabet.
Speaker 5: Absolutely, I think you have to make that assumption. I mean,
Speaker 5: the world is only going in one direction. Productivity is
Speaker 5: only going to get growth, and you need to leverage
Speaker 5: the infrastructure that these companies have built in order to
Speaker 5: achieve those goals and capitalize on those opportunities. That being said,
Speaker 5: you know, the money and the profits do matter, and
Speaker 5: we're going through a transition period right now. Where kind
Speaker 5: of growth assumptions are being revisited, valuations assumptions are being revisited.
Speaker 5: I mean, if you look at all the companies that
Speaker 5: are reported thus far, and a lot of them are
Speaker 5: traded down. I think Metap being kind of the main exception.
Speaker 5: Estimates have gone up for the most part. However, I
Speaker 5: mean Palenteers actually the poster re shop of this. Estimates
Speaker 5: came up materially. However, the stock has since fallen back
Speaker 5: a lot. And what that means is when estimates go
Speaker 5: up and the stock goes down, that means there's valuation compression.
Speaker 5: And you're seeing the market right now north of three
Speaker 5: time sales valuations are at or near all time highs,
Speaker 5: and you know they have to come in and that's
Speaker 5: why you got to stay nimble, you got to stay hedged.
Speaker 5: And I don't think any of these companies are going
Speaker 5: to be immune, with the exception of semiconductor companies, which
Speaker 5: are probably the only area of the market where you
Speaker 5: can likely see our performance relative to expectations by the
Speaker 5: biggest margin on on earnings versus other text companies and
Speaker 5: other sectors.
Speaker 1: So when you know when when Meta Platforms was he
Speaker 1: was Meta earlier this, No, it was Alphabet. I'm losing
Speaker 1: losing track here, James, Thank.
Speaker 2: You, Carol, C.
Speaker 3: Matt Miller not the only one who forgets what dat
Speaker 3: it is when Alphabet.
Speaker 1: You know, when when other companies report higher than expecting
Speaker 1: cap X like Alphabet yesterday, you know, you see at
Speaker 1: least the knee jerk reaction you could see like a
Speaker 1: Broadcom moving higher. For example, who's the beneficiary of this
Speaker 1: two hundred billion dollars?
Speaker 5: I mean, it's all the companies that you you'd consider,
Speaker 5: you know, within the AI ecosystem from Envideon down. But
Speaker 5: really what we're focused on in terms of our holdings
Speaker 5: is where the scarcity is. You know, we think there's
Speaker 5: scarcity in two aspects of the semi conductor industry, and
Speaker 5: that's memory and manufacturing. You know, that's why we actually
Speaker 5: took up our Intel position today. You know, Micron continues
Speaker 5: to be one of our top holdings, and you know
Speaker 5: we follow. We think that the other areas of the
Speaker 5: semi conductor landscape will increasingly become commoditized over time, and
Speaker 5: that includes Nvidia and d and others. So we're focused
Speaker 5: on the areas of scarcity and we think those will
Speaker 5: continue to approve a disproportionate amount of the benefits. But
Speaker 5: as far as where this capex spend goes, you know,
Speaker 5: I think there will be a rising times lifts all
Speaker 5: both situations. But who has the pricing power of that
Speaker 5: and the most material upside testaments that's where we are focuses.
Speaker 3: We should point out shares of Nvidia in the aftermarket
Speaker 3: are just up about one quarter of one percent. I'm
Speaker 3: going to look at something like a Micron and that stock.
Speaker 3: Let me just pull it up here to see if
Speaker 3: there's any movement. It's actually down about one point three percent.
Speaker 4: Hey.
Speaker 3: One of the things I want to just ask you about.
Speaker 3: It's in the press release Amazon writing that it introduced
Speaker 3: AWSAI factories to transform customers existing data centers into higher
Speaker 3: performance AI environments, which accelerates AI buildouts by months or
Speaker 3: years compared to building independently. So it sounds like they've
Speaker 3: got a little service, like you've got a data center,
Speaker 3: we can help get you up to speed. Is that
Speaker 3: kind of what that's about.
Speaker 5: Well, I'm hearing it real time from you right now,
Speaker 5: so I need to look into it. But you know,
Speaker 5: services are a big part of the AWS offering, and
Speaker 5: Amazon offering. And that's because it's all about how do
Speaker 5: I increase utilization of my platform? And you know, if
Speaker 5: you can educate, train and build awareness of the capabilities
Speaker 5: and the trajectory of offerings, that will only increase utilization
Speaker 5: and stickiness and customer attention over time. So not surprised
Speaker 5: that they're doing something like that. Specific of that I
Speaker 5: need to look.
Speaker 3: No, that's okay. I'm getting up to speed too. I
Speaker 3: just looked at a press release. This is back in December,
Speaker 3: and they talked about by combining the latest a WS
Speaker 3: Trainium accelerators and Nvidia GPUs and so on and so forth,
Speaker 3: They're talking about how they can accelerate these factories. I'm
Speaker 3: just curious about aws's own chips and accelerators.
Speaker 2: That's an important business to them.
Speaker 5: I think it increasingly will become an important business to
Speaker 5: them Google as well. I think there's a lot of
Speaker 5: opportunity there. It's very early days. Obviously there's a balancing
Speaker 5: act with Nvidia and other players, so not stepping on toes,
Speaker 5: but I think it will. That's an area of optionality
Speaker 5: for the business that's right now not getting an incredible.
Speaker 1: Hey, Jim's just an overall sentiment. You say you're not
Speaker 1: adding any positions except semiconductors right now. I'm just wondering
Speaker 1: how you're looking at your overall sentiment in an environment
Speaker 1: where we're seeing, you know, declinekind of more than one
Speaker 1: percent and tech stocks on the day today, we're seeing
Speaker 1: decline of seven and a half percent on Amazon.
Speaker 4: Right now.
Speaker 1: Bitcoin's down, yeah, fifty percent from its October highs It's
Speaker 1: it's down today eighty nine thousand dollars. What sentiment look like?
Speaker 1: Is bitcoin a leading indicator to you?
Speaker 5: Well, I'll take the first part first. The as far
Speaker 5: as where we're adding. That was with respect to technology stocks.
Speaker 5: You know, within technology we're exclusively adding, but we are
Speaker 5: adding other areas. You know, aerospace defense continues to be
Speaker 5: an area that we're increasing our weight. We're increasing our
Speaker 5: sizing of utilities and staples. You know, we think that
Speaker 5: you know, any money we can pull out of stocks
Speaker 5: that have run and the non scarce components of technology,
Speaker 5: we will we're putting into value, with the exception of
Speaker 5: seven conductors. As far as bitcoin is concerned, you know,
Speaker 5: we think that this is all about leveraging the system.
Speaker 5: You know, Bitcoin crypto has more leverage than pretty much
Speaker 5: arguably any other part of the market right now. So
Speaker 5: you're seeing disproportionate hits from that unwinding, and as that
Speaker 5: leverage unwinds, you're seeing it trickle down into and proliferate
Speaker 5: into the other aspects of the market. And we're really unsure,
Speaker 5: you know, how much leverage there is ultimately how much
Speaker 5: more is left to unwind. So I've seen some headlines
Speaker 5: that suggest that, you know, is this does this negate
Speaker 5: the whole debasement argument, the digital gold argument for bitcoin.
Speaker 5: I would venture to say the answer to that is
Speaker 5: still no. But at the same time, there's a lot
Speaker 5: of leverage in the system and that's unwinding and that's
Speaker 5: going to I think exacerbate pressures in the market over
Speaker 5: the short term, and you've seen thus far.
Speaker 3: As always, I'm so glad you could weigh in on this. James,
Speaker 3: Thanks so much, James chack Mak He's partner and chief
Speaker 3: investment officer Clockwise Capital. They've got about seven hundred million
Speaker 3: dollars in assets under management. Joining us on this Amazon
Speaker 3: Thursday s