Latest news with #Jassy
Miami Herald
a day ago
- Business
- Miami Herald
Amazon CEO sounds the alarm on key consumer problem
Amazon has a massive advantage over most retailers. Its size gives it a level of buying power that's unprecedented. Basically, only Walmart sits in a similar position and even players like Target and Costco don't have the same ability to dictate terms to suppliers. Normally, Amazon controls its own fate. It can tell suppliers to lower prices, make demands on packaging, and otherwise set its own terms. Related: Large supermarket chain faces massive boycott That does not make it immune to what's happening in the world. Amazon (AMZN) suffered with supply chain issues during the Covid pandemic and it had periods where certain items were out of stock. Amazon also had times where it offered a version of the item you wanted through a third-party seller, but maybe not the way you wanted it. That included off-brands, slower delivery times, and other changes. Don't miss the move: Subscribe to TheStreet's free daily newsletter Part of that was by choice. For a few months during the darkest days of the pandemic, Amazon prioritized some items over others based on unprecedented consumer demand. In other cases, though, the supply chain failed. Amazon ran out of toilet paper just like every other retailer. And, was the overall economy deals with the uncertainty of President Donald Trump's tariffs, even Amazon is not immune to their impact. Amazon CEO Andy Jassy shared his worries and plans during the company's first-quarter earnings call. "It's hard to tell what's going to happen with tariffs right now. It's hard to tell where they're going to settle and when they're going to settle. And so, a lot of what we're thinking about short and medium term actually turns out to be what we think about long-term too, which is, how do we actually have the broadest possible selection for customers at the lowest possible prices?" he shared. Jassy made it clear that prices remain his company's focus. "And there's maybe never been a more important time in recent memory than trying to keep prices low, which we're heads down, pretty maniacally focused on, and then get things to people quickly and take care of customers. And that is the heart of what we're doing," he added. More Retail: Costco quietly plans to offer a convenient service for customersT-Mobile pulls the plug on generous offer, angering customersKellogg sounds alarm on unexpected shift in customer behavior Jassy also shared some of Amazon's strategies for dealing with the uncertainty of tariffs. "You can see different initiatives that we've taken within those priorities. We've done some forward buys of inventory where we're the first-party seller. Our third-party sellers have pulled forward a number of items so that they have inventory here as well," the CEO shared. "We're encouraging that because we're trying to keep prices as low as possible for customers." Jassy shared some insight into why Amazon has an edge over most rivals. "I think also, when you have as broad selection as we have, and we have much broader selection than other retailers, it means that when you've got this continuity, like we may potentially have, you're better able to help customers find what they want, no matter what those trends are," he said. That does not mean that Amazon won't have problems or have to raise prices on some items. "And I mentioned in my opening comments about what happened in the pandemic, and you can bet there are going to be things that we don't anticipate that customers really value and want that are different. It could be as simple, by the way, as just favoring other brands that maybe people didn't know about before, but where they have a more favorable price equation for customers," he said. Amazon, he noted, can also leverage its huge network of third-party sellers. "Another thing that people forget is that when you've got 2 million-plus sellers, they're not all going to take the same strategy if there ends up being higher tariffs. I mean, there are going to be plenty of sellers that decide to pass on those higher costs to end consumers, but they're going to - we have a lot of sellers in lots of different countries, and not all of them are going to pursue the same tack," he explained. Related: Target faces another massive boycott from customers The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
a day ago
- Business
- Yahoo
Tariffs Test Big Tech: Apple, Amazon, and Meta Brace for Costly Disruption
Big Tech execs had front row seats at President Donald Trump's inauguration in January. About 100 days later, and this week's latest earnings calls show what impacts tariffs have had and how the companies are bracing for a financial storm. This week, numbers from the Commerce Department revealed the nation's economy shrank during the first quarter of 2025-the first decline since the opening three-month period of 2022. U.S. gross domestic product-the value of all goods and services produced across the country-fell at a seasonally adjusted 0.3% annual rate, as companies increased imports and prepared to navigate the Trump administration's tariffs. For Big Tech firms, that impact is manifesting in a range of ways. Apple is eyeing a $900 million cost hit by mid-2025, while Microsoft leans on AI to buffer economic pressure. As uncertainty clouds global trade, Google, Meta, and Amazon also face shifting costs and supply chain headaches. Here's what the Silicon Valley titans had to say during their earnings calls this week. Google flagged that changes to the de minimis exemption could pose a "slight headwind to our ads business in 2025, primarily from APAC-based retailers," svp and chief business officer Philipp Schindler said during the earnings call with investors. When asked by an investor whether any specific ad verticals or regions were showing signs of weakness quarter-to-date, Schindler said the company is "obviously not immune to the macro environment," but declined to speculate further. He did not directly address tariffs. Meta pointed to reduced ad spend from Asia-based ecommerce exporters ahead of the May 2 expiration of the de minimis exemption. Chief financial officer Susan Li said some of that spend has shifted to other markets, but overall levels remain below what the company saw prior to April. She added that there's still uncertainty about how the change will affect Q2 performance. Amazon hasn't seen a drop in consumer demand tied to tariffs-yet. CEO Andy Jassy said the company is observing "heightened buying" in some categories, likely due to consumers shopping ahead of potential price hikes. While average selling prices haven't meaningfully increased, Jassy attributed that to forward buying by Amazon and its sellers, as well as delayed pricing changes. He cautioned that this could shift depending on where tariffs land. "Amazon is not uniquely susceptible to tariffs," Jassy said. "As it relates to China, retailers who aren't buying directly from China are typically buying from companies who themselves are buying from China, marking these items up, rebranding, and selling to U.S. consumers. These retailers are buying the product at a higher price than Chinese sellers selling directly to U.S. consumers in our marketplace, so the total tariff will be higher for these retailers than for China direct sellers." The word 'tariff' was mentioned 18 times in the call. Amazon's Q2 outlook is "inherently unpredictable and may be materially affected" by fluctuations in foreign exchange rates, tariff and trade policies, inflation, interest rates, and broader global economic conditions, according to vp of investor relations Dave Fildes. Still, Jassy said he's optimistic the retail giant could come out of the current tariff environment stronger, as it did with past disruptions like the Covid-19 pandemic. Tariffs came up only once in Microsoft's prepared remarks during the earnings call. CFO Amy Hood noted that Windows OEM and devices revenue grew 3% year over year, exceeding expectations. She attributed part of the bump to elevated inventory levels, as tariff uncertainty led to stockpiling throughout the quarter. While Microsoft's direct exposure to tariffs is limited compared to companies that either sell physical goods or provide platforms for companies selling those goods, it still faces risks. Rising equipment costs and potential cuts to clients' software budgets could have an impact. CEO Satya Nadella pointed to the company's expanding AI infrastructure-particularly investments in Nvidia GPUs-as an area where tariff-driven costs could emerge. Still, he positioned software as a deflationary force. "If you buy into the argument that software is the most malleable resource we have to fight any type of inflationary pressure or growth pressure where you need to do more with less, I think we can be super helpful in that," Nadella said. Apple CEO Tim Cook said that if current tariff conditions persist, the company could face an additional $900 million in costs for the June 2025 quarter. In that quarter, Cook said the majority of iPhones sold in the U.S. will come from India, while iPads and Macs imported to the U.S. will be manufactured in Vietnam. Cook confirmed that China would remain the primary source for the "vast majority" of Apple products. Sign in to access your portfolio
Miami Herald
7 days ago
- Business
- Miami Herald
Amazon coders have a surprising reason for hating GenAI
It has been nearly three years since OpenAI released ChatGPT series 3.5 in November 2022, officially kicking off the modern artificial intelligence revolution. Since then, every tech company, from Microsoft to Apple to Alphabet to Tesla and beyond, has cumulatively invested hundreds of billions of dollars in order to be at the forefront of the revolution. One of the things AI has promised to do is free humankind from banal, remedial work, automating processes that used to take hours, days, or longer. Related: Elon Musk says he is 'paranoid' about this issue; he's right to be Alarmists say the revolution will cause an employment crisis, as the pool of available jobs shrinks. AI evangelists will call that type of talk overblown. In their view, AI will free up the average worker's time, making them more productive and creating countless other jobs. There is evidence that college graduates are already feeling the crunch. Nearly 6% of recent college graduates were unemployed during the first quarter of 2025, up significantly from the 4.5% that reported being unemployed a year ago. The underemployment rate also rose to 41.2% from 40.6% in that time period, according to the Federal Reserve Bank of New York. The college majors with the highest percentages of underemployment were anthropology, physics, commercial art and graphic design, fine arts, sociology, and, perhaps surprisingly, computer engineering, according to a recent report in The Independent. Ironically, coding is becoming one of the first casualties of the AI revolution. Amazon (AMZN) CEO Andy Jassy has long touted the benefits of generative AI, not just for Amazon customers, but for Amazon coders as well. "With what's happening in AI right now, and the likelihood that every customer experience we've ever known will be reinvented, there has never been a more important time, in my opinion, to optimize to invent well," Jassy told shareholders last month about the company's future. Jassy believes that generative AI is going to change the company's customer experience completely. To handle this, Amazon is building more than 1,000 GenAI applications across the company. Amazon plans to revolutionize the customer experiences in shopping, coding, personal assistants, streaming, advertising, health care, reading, and home devices. Related: Jamie Dimon sends stark warning on the economy Internally, the early AI workloads the company already deployed are focused on worker productivity and cost avoidance. "This is saving companies a lot of money. Increasingly, you'll see AI change the norms in coding, search, shopping, personal assistants, primary care, cancer and drug research, biology, robotics, space, financial services, neighborhood networks -everything," Jassy said. However, a new report from the New York Times says some of the workers implementing this system hate the changes being made, as the company has pushed them to increase the use of AI in their work. Engineers have raised output goals and have become less forgiving about missed deadlines. One Amazon engineer said in the piece that his team had been halved in the past year, but he was still required to produce about the same amount of code using AI. The company told The Times that it regularly conducts reviews to make sure it isn't overtaxing its workers. More on Amazon: Amazon CEO shares an unexpected trend in customer behaviorAmazon quietly develops creepy new technologyAmazon makes wild move shoppers did not expect But the engineers say that AI in their workplace has had the same effect robotics in Amazon warehouses have had on those workers. Robotics in Amazon warehouses have transformed the way people work there. A decade ago, workers had to walk countless miles per day to fulfil orders. Now, thanks to robotics, that type of work has been significantly reduced. However, Amazon workers now have to deal with being too efficient, which vastly increases the amount of work they do, even if they don't have to walk as much. Amazon engineers are having the same feeling, according to the report. The number of menial tasks they have to complete has been reduced thanks to automated coding, but the overall amount of work they are doing has expanded. Websites they were previously given weeks to build must now be built in a few days. While AI can generate a lot of code that used to have to be manually written, coders still have to check the generative work, which takes time. "It's more fun to write code than to read code," said Simon Willison, an AI fan, longtime programmer and blogger, told the Times. "If you're told you have to do a code review, it's never a fun part of the job. When you're working with these tools, it's most of the job." Amazon says it hears employees' complaints and that it is always tweaking processes to make workflow easier for them. However, it is also clear the company plans to make AI work, no matter what. Earlier this year, the company said it plans to spend $100 billion on AI infrastructure in 2025, with most of that money being allocated to AI capabilities for Amazon Web Services. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
22-05-2025
- Business
- Miami Herald
Amazon CEO shares surprising info on a new customer trend
Ever since President Donald Trump announced news of his tariffs on April 2, a day the administration calls "Liberation Day," a wave of fear has swept across the country as both consumers and business owners have grappled with what the new levies mean for them. In the business sector, companies that previously relied heavily on China and other international countries for exports scrambled to redirect their supply chains to other countries. Apple, for instance, announced it would move its manufacturing of Phones to India, a move that prompted open disdain from Trump after CEO Tim Cook announced it. Don't miss the move: Subscribe to TheStreet's free daily newsletter Other businesses simply had to tell their customers that prices would be going up. Walmart made that move this week, saying prices would go up in May and then "much more" in June. This also earned President Trump's anger, causing him to post on his social media network Truth Social that the retailer should "eat the tariffs." Related: Walmart just made major strides in key area where Amazon excels Naturally, all these messages from some of the biggest retailers in the world are having a negative effect on consumers. New York Fed President John Williams said in an interview with Bloomberg that businesses are reporting a slowing of consumer spending as people steel themselves for what's to come. Amazon CEO Andy Jassy just weighed in on this topic during Amazon's annual shareholder meeting on April 21, and what he shared was surprising, to say the least. While many businesses are already reporting on customer behavior changing around spending, Jassy says that Amazon has not seen the same problem. "We have not seen any attenuation of demand at this point," Jassy said during a Q&A held during the meeting. "We also haven't yet seen any meaningful average selling price increases." Related: Amazon quietly develops creepy new technology One part of this may be due to the "strategic forward inventory buys" Jassy spoke about the company making in April in order to stock up on goods. While some of Amazon's third-party sellers have increased prices, Amazon told CNBC in a statement that "fewer than 1% of the items studied saw an increase in price." Earlier in May, Amazon reported it was considering displaying tariff costs on certain items. This also angered President Trump, who called Amazon founder Jeff Bezos to discuss the issue. Trump later told reporters that Bezos "solved the problem very quickly." Consumers are understandably shaken about the prospect of prices going up, especially when retailers as big as Walmart announce that tariffs will drive up prices on their products. Amazon has an advantage here: by reassuring customers that prices are not going up, the company will naturally attract people who don't want to pay more. This may mean that longtime Walmart shoppers consider signing up for an Amazon Prime account instead. The two companies are often neck-and-neck in terms of revenue, although in February 2025, Amazon surpassed Walmart with $187.8 billion in sales, beating Walmart's $180.5 billion. Prior to this, Walmart had been the top revenue generator every quarter since 2012. The situation might just give Amazon an edge over Walmart. And it would present Walmart with another big problem beyond grappling with tariffs. Related: Amazon makes wild move shoppers did not expect The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
22-05-2025
- Business
- Yahoo
Prediction: This Artificial Intelligence (AI) Stock Will Be Worth $5 Trillion in 5 Years
Artificial intelligence (AI) has become a core focus for Amazon's e-commerce and cloud infrastructure businesses in particular. In less than two years, Amazon's valuation has soared by nearly $1 trillion as AI-driven efficiencies are starting to become realized. Amazon's long-term growth prospects look strong, and a $5 trillion valuation by 2030 looks achievable. 10 stocks we like better than Amazon › Amazon (NASDAQ: AMZN) is best known for its e-commerce marketplace and Prime subscription service. While online shopping and fast shipping are indeed two of Amazon's major pillars, the company has been quietly building new opportunities in the area of artificial intelligence (AI). Let's explore what investments Amazon has made in AI over the last couple of years, and how they are reaping dividends for the company's growth. From there, I'll break down why AI is such a meaningful tailwind for the company and explain why I think Amazon is headed for a $5 trillion valuation over the next five years. Amazon has been investing aggressively in several different areas of AI. Chief among them is that the company has plowed a whopping $8 billion into generative AI start-up Anthropic. Anthropic is now an integral part of Amazon's cloud infrastructure business, Amazon Web Services (AWS) -- spurring a new period of accelerating revenue and operating margins. On top of that, Amazon has also been designing its own custom silicon chips -- dubbed Trainium and Inferentia. In theory, by using its own custom tech stack and moving away from a reliance on outside GPUs from Nvidia or Advanced Micro Devices, Amazon has the ability to enter new markets and generate significant cost synergies in the long run. Lastly, Amazon is also leading the charge in AI robotics -- outfitting many of its fulfillment centers with machines that are able to automate human-driven processes. This is yet another way Amazon is positioning itself to yield greater returns on its AI investments by making core parts of the business more efficient. Amazon and Anthropic initially announced their partnership on Sept. 25, 2023. Since that announcement, Amazon has added nearly $1 trillion in market capitalization (as of May 19). Admittedly, an increase of this magnitude in such a short time frame may suggest shares of Amazon are due for a pullback. While I wouldn't rule that out, I think the longer-term picture for Amazon remains bullish. During Amazon's first-quarter earnings call earlier this month, CEO Andy Jassy told investors that the company's "AI business right now is a multibillion-dollar annual run rate business that's growing triple-digit percentages year over year." He followed that up by saying, "as fast as we actually put the capacity in, it's being consumed." Jassy is essentially saying that demand for Amazon's AI services is so high that the company needs to quickly reinvest back into these operations in order to fulfill customer needs. These supply-demand dynamics aren't going to be solved in one quarter, but they are very good problems to have. The big picture is that customers can't get enough of Amazon's AI ecosystem, suggesting the business is in a strong position to scale over the coming years. The chart illustrates Wall Street's consensus revenue estimates for Amazon over the next couple of years. Between now and 2027, analysts expect Amazon to maintain 10% annual revenue growth. If I assume this rate does not change, Amazon would be on pace to generate $1.1 trillion in sales by 2030. As of this writing, Amazon's price-to-sales (P/S) ratio is 3.4 -- much lower than many of its "Magnificent Seven" peers. If Amazon maintains this P/S multiple, the company would be trading for a market cap of roughly $3.8 trillion by 2030. In order to reach a $5 trillion valuation, Amazon's P/S would need to expand to roughly 4.5, assuming a 10% annual growth rate. The way I think about Amazon's valuation dynamics is that the company has already added nearly $1 trillion in value, despite AI being an incredibly nascent part of the business right now. Over the next five years, I think Amazon's AI-inspired investments will start to become more obvious -- seen through accelerating revenue across different areas of the business, widening operating margins, and robust free cash flow growth. Should this come to fruition, I think Amazon could be in a position to witness either an increase in revenue above 10% annual growth, or an expansion in its multiples -- bringing it in line with other leading cloud and chip businesses such as Microsoft or Nvidia. To me, Amazon has multiple avenues to achieve a $5 trillion valuation by 2030. I think the stock is trading at attractive levels right now, and long-term investors may want to consider scooping up shares and holding on tight. Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $807,814!* Now, it's worth noting Stock Advisor's total average return is 962% — a market-crushing outperformance compared to 169% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Prediction: This Artificial Intelligence (AI) Stock Will Be Worth $5 Trillion in 5 Years was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
