Latest news with #Trainium2
USA Today
5 days ago
- Business
- USA Today
Amazon Stock: Buy, Hold or Sell?
Amazon Stock: Buy, Hold or Sell? Amazon has the ingredients to keep growing for a while. After touching a multi-year low of around $84 in early 2023, Amazon's (NASDAQ: AMZN) stock price has more than doubled to $200 (as of this writing), thanks to the improvement in financials. As the company moves forward on tailwinds such as artificial intelligence (AI) and facing headwinds such as the e-commerce slowdown, investors may wonder: Is now the time to buy, hold, or sell Amazon stock? Let's take a closer look. How did Amazon perform in 2024? First, a review of Amazon's recent performance, focusing on its 2024 performance. Overall, it was a solid year for several reasons. Amazon expanded revenue by 11% to $638 billion, thanks to growth across all three major segments. North America was up by 10%, international was up by 9%, and Amazon Web Services (AWS) was up by 19%. While an 11% revenue growth rate is not unusually high, it is still remarkable considering the scale that Amazon operates in. Moreover, while its top-line growth was solid, the highlight of Amazon's performance in 2024 was the massive improvements in its bottom line. Operating profit jumped 86% from $36.9 billion to $68.6 billion, due to profit growth across all segments. The rapid margin expansion demonstrates the giant's strong execution capabilities in managing its costs and the benefits of operating leverage. Operationally, Amazon continued to improve delivery speeds, with more than 65% more items delivered to Prime members the same day or overnight than in the fourth quarter of 2023. It also launched Amazon Haul, a new ultra-low-price shopping service in the U.S., to compete against low-cost players like Temu and Shein. Similarly, in its cloud computing business (AWS), the tech company delivered good progress in 2024, such as introducing its new Trainium2 AI chip, establishing its foundation models in Amazon Nova, and creating new models and features in Amazon Bedrock that give customers flexibility and cost savings. All these innovations help position the company in the ongoing AI race. In other words, despite its size, the tech giant is still executing well to delight its users and maintain its share in key markets. What are Amazon's prospects in the coming years? Amazon might have become a household name thanks to the success of its e-commerce business, but the most significant growth drivers in the next few years will likely come from other segments. The biggest winner will likely be AWS, which rides on megatrends like AI advancement and the ongoing migration to the cloud. For instance, the global AI market is expected to grow from $294 billion in 2024 to $1.772 billion by 2032, a compound average growth rate of 29%. As the most significant cloud computing player globally with a 30% market share, AWS is primed to benefit from this once-in-a-generation trend. Another business gaining traction (which could accelerate further in the coming years) is Amazon's advertising business. Centered around Prime Video and Amazon Search, the advertising business generated $14 billion in revenue in the first quarter of 2025, up 18% year over year. This segment grew even faster than AWS (up 17% in the same quarter). Like AWS, advertising is a high-margin business, which will likely contribute to a margin expansion for the giant over time. Unlike the previous two businesses, the e-commerce segment could see a mixed performance in the coming years. On the positive end, Amazon can leverage its massive scale to gain market share from traditional brick-and-mortar shopping and expand in emerging markets like India. The downside is that it has to deal with the uncertainties of tariffs and emerging competitors like Temu and Shein. So, while Amazon is still favorably positioned to grow its e-commerce business, the e-commerce prospects will not be as straightforward as those of AWS and the advertising business. Still, while the prospects may differ for Amazon's various business segments, it is essential to highlight that the company has an unusual culture centered around its "Day 1" mentality. This mentality focuses on customer obsession, embracing new trends, willingness to experiment and fail, and avoiding bureaucracy. As long as the company can maintain this culture, it is well-positioned to continue growing in the years to come, albeit at a slower pace, given its already enormous size. Is Amazon's stock cheap? Here's another factor that investors should consider before making a move in Amazon's stock: The stock valuation in relation to its past. Here, let's use price-to-sales (P/S) as a proxy. Amazon's P/S ratio has ranged from 1.7 to 4.6 times in the last five years. As of this writing, it is 3.3 times, just around the middle of that range. The current valuation suggests that while Amazon's stock is not a bargain today, it is not excessively priced compared to its past valuation. What it means for investors Amazon delivered strong results in 2024, highlighting the strength of its execution capabilities. Its high-margin segments – AWS and advertising – will drive future growth, supported by trends like AI adoption. While e-commerce faces mixed prospects, Amazon's Day 1 culture will likely keep it competitive for the foreseeable future. So, while the stock is not a screaming buy today, it is not a sell. Existing investors should hold on to the stock, while investors with a long-term horizon could consider buying a small position and adding to that position over time. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Amazon right now? Offer from the Motley Fool: Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks 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 whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you'd have $651,049!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you'd have $828,224!* Now, it's worth notingStock Advisor's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you joinStock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Yahoo
28-05-2025
- Business
- Yahoo
Susquehanna Cuts Marvell (MRVL) Price Target to $90, Keeps Positive Rating Ahead of Earnings
We recently published a list of . In this article, we are going to take a look at where Marvell Technology, Inc. (NASDAQ:MRVL) stands against other AI stocks gaining Wall Street's attention. On May 27, Susquehanna lowered the firm's price target on Marvell Technology, Inc. (NASDAQ:MRVL) to $90 from $110 and kept a 'Positive' rating on the shares. Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers. Susquehanna's rating update follows Marvell's upcoming quarterly report. While the firm is of the view that Marvell will deliver results in line with expectations, there are concerns about the increased variability in T2 volume deployment. The firm also noted a weakened sentiment surrounding XPUs/ Inphi following the postponed Investor Day. Originally scheduled for June 10, 2025, Investor Day was postponed due to the dynamic macroeconomic environment. The company now plans to conduct a webinar, particularly on the future of custom silicon for AI infrastructure. The company also reaffirmed its April quarter revenue midpoint of $1.875 billion in the announcement. This was viewed as underwhelming due to the modest guidance for April and strong competitor AI results. An assembly line in a semiconductor factory, with workers at their stations. The overall demand for data centers remains robust due to hyperscalers' continued investment in AI. This demand is likely to benefit Marvell's Inphi PAM4 DSPs and custom ASIC/AI products. However, the firm noted how Marvell may not be able to fully benefit from this due to a lower-than-expected implied average selling price (ASP) for its Trainium2 product and a modest quarter-over-quarter growth in the data center sector. All of these factors have led Susquehanna to maintain its cautious outlook toward the stock. Overall, MRVL ranks 5th on our list of AI stocks gaining Wall Street's attention. While we acknowledge the potential of MRVL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MRVL and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
20-05-2025
- Business
- Yahoo
Jim Cramer on NVIDIA (NVDA): ‘You Can't Own It Like You Used To'
Jim Cramer in a CNBC program last month mentioned how and why he recommended investors trim their Nvidia stakes. Cramer has long been a believer in holding on to Nvidia, but recently changed his views, which was a shock for many. 'I put out a piece yesterday that was quite painful for me to write to the club members. I do a big Sunday think piece, and it was about how you could no longer trust the government in NVIDIA Corp (NASDAQ:NVDA). You could just no longer do it. So therefore, you can't own it like you used to, meaning you have to trim. And I said, 'I'm going to have to sell some.' One of the reasons I did it—well, it turns out just this very evening, without any notice, different from even when I talked about it at the top of the show, the government decided, you know what, we're going to put new restrictions on the H20, which is the dumbed-down version of the latest and greatest NVIDIA Corp (NASDAQ:NVDA) chip. And it's really kind of shocking. But is it really? I wrote that piece because I expect stuff like this to happen, and it's going to have a big charge. It's a different world. Nvidia gives a huge amount of money, decides to build as much here like Apple—it buys them nothing. All that I know is that if you do a lot of business in China—and if you're a club member, you know this—then your stock's going to suffer. And that includes now NVIDIA Corp (NASDAQ:NVDA) too.' Most of Cramer's concerns were related to Nvidia's China exposure. Now that the US has reached a 90-day deal with China on tariffs, it would be interesting to see Cramer's response. Nonetheless, the core threats to Nvidia remain. Nvidia is facing challenges at several levels. Competition is one of them. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC's 3nm capacity, which could limit Nvidia's access to these chips. Why? Because Nvidia also uses TSMC's 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offers alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia's offerings. Apple is reportedly working with Broadcom to develop an AI server processor. Intel is also trying hard to get back into the game with Jaguar Shores GPU, set to be produced on its 18A or 14A node. Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 investor letter: 'NVIDIA Corporation (NASDAQ:NVDA) is the undisputed leader in accelerated computing, with dominant market share in Graphics Processing Units (GPUs) powering AI workloads across data centers, edge devices, and emerging platforms. Its end-to-end ecosystem—from silicon to software (CUDA, networking, and AI frameworks)—creates high switching costs and a widening competitive moat. With secular demand for AI infrastructure still in its early innings, Nvidia stands to benefit from sustained topline growth and strong operating leverage. In early January, a little known Chinese AI company, DeepSeek, released its large language model (LLM), DeepSeek-R1, to an unexpecting world. This model was purportedly trained on very few high-end Nvidia chips and was highly efficient when compared to other leading models. This release set off a chain reaction where investors have had to grapple with the idea that the world may not need as many GPUs as previously thought, which hampered the Nvidia buy case and sent the P/E multiple down to its cheapest level in the past 5 years.' While we acknowledge the potential of NVDA our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. 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
Yahoo
02-05-2025
- Business
- Yahoo
Amazon.com Inc (AMZN) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and AWS Expansion ...
Revenue: $155.7 billion, up 10% year-over-year, excluding foreign exchange impact. Operating Income: $18.4 billion, up 20% year-over-year. Free Cash Flow: $25.9 billion trailing 12-month. North America Revenue: $92.9 billion, an increase of 8% year-over-year. International Revenue: $33.5 billion, an increase of 8% year-over-year, excluding foreign exchange. Advertising Revenue: $13.9 billion, growing 19% year-over-year. AWS Revenue: $29.3 billion, an increase of 17% year-over-year. AWS Annualized Revenue Run Rate: Over $117 billion. Net Income: $17.1 billion, includes a pretax gain of $3.3 billion from investment in Anthropic. Capital Expenditure: $24.3 billion in Q1, primarily for technology infrastructure and fulfillment network. Q2 Revenue Guidance: Expected between $159 billion and $164 billion. Q2 Operating Income Guidance: Expected between $13 billion and $17.5 billion. Warning! GuruFocus has detected 2 Warning Sign with AMZN. Release Date: May 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Inc (NASDAQ:AMZN) reported a 10% year-over-year increase in revenue, reaching $155.7 billion, excluding the impact of foreign exchange rates. Operating income rose by 20% year-over-year to $18.4 billion, showcasing strong financial performance. Amazon Web Services (AWS) achieved a 17% year-over-year growth, reaching a $117 billion annualized revenue run rate. The company set new delivery speed records, delivering more items in the same day or next day than any other quarter in its history. Amazon's advertising revenue grew by 19% year-over-year, generating $13.9 billion, indicating strong growth in this segment. Inc (NASDAQ:AMZN) faces uncertainty due to potential heightened tariffs, which could impact pricing and demand. The company recorded onetime charges related to historical customer returns and costs to receive inventory pulled forward due to anticipated tariffs. AWS capacity constraints are limiting the ability to capture more AI revenue, despite high demand. The macroeconomic environment remains complex, with uncertainties around consumer demand and global trade impacting future guidance. Stock-based compensation expenses are expected to increase in Q2, impacting operating income. Q: How is Amazon addressing the supply-demand imbalance for AI workloads in AWS, and when can we expect acceleration in AI revenue? A: Andrew Jassy, CEO, explained that Amazon is rapidly increasing its capacity for AI workloads by adding more P5 GPU instances and Trainium 2 instances. The AI business is currently a multibillion-dollar annual run rate, growing at triple-digit percentages year-over-year. The company expects supply chain issues to improve as the year progresses, which will help capture more AI revenue. Q: What are Amazon's strategic priorities in light of global trade uncertainties, and how are these reflected in the Q2 operating income guidance? A: Andrew Jassy, CEO, emphasized the focus on maintaining broad selection, low prices, and fast delivery. Amazon is encouraging forward buying of inventory to keep prices low. Brian Olsavsky, CFO, noted that Q2 guidance includes typical seasonal increases in stock-based compensation and additional costs related to Project Kuiper launches. Q: Can you explain the fluctuations in AWS revenue growth and how it compares to competitors? A: Andrew Jassy, CEO, stated that AWS revenue can be lumpy due to the unpredictable nature of enterprise sales cycles and the rapid growth of AI workloads. Despite a larger base, AWS's 17% year-over-year growth on a $117 billion revenue run rate is significant. The company expects capacity constraints to ease, allowing for more growth. Q: What is driving the strong margin performance in AWS, and how should we think about future margins? A: Brian Olsavsky, CFO, attributed the strong AWS margins to growth, cost optimization efforts, and advancements in custom silicon like Graviton. Future margins will be influenced by ongoing investments in infrastructure and the evolving mix of generative AI services. Q: How is Amazon planning to enhance Alexa's capabilities, and what challenges exist in shifting user behavior? A: Andrew Jassy, CEO, highlighted the launch of Alexa Plus, which is more intelligent and capable of taking complex actions. The challenge lies in rewiring user behavior to utilize these new capabilities. Amazon plans to continue adding functionality to Alexa Plus to enhance user experience. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
01-05-2025
- Business
- Yahoo
Jim Cramer Says NVIDIA (NVDA) Being ‘Punished' for Doing Business With ‘Enemy Nation'
We recently published a list of . In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other top buzzing stocks you should watch today. Jim Cramer in a recent program on CNBC expressed surprise that the Republican administration could be this damaging to shareholders 'These are hideous depressing days for the bulls. I'm not used to seeing a White House that doesn't seem to care that it's causing the decline. It's dazzlingly counterintuitive to see a Republican in particular be so callous toward the shareholder class. After all historically that constituency has been very pro-Republican. It's a total blast zone out there and ground zero is tech.' Cramer said that the tech selloff forced him to revisit his age-old mantra of 'own it, don't trade it' regarding two major technology stocks. READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In. For this article, we picked 10 stocks Wall Street analysts are paying close attention to. With each company, we have mentioned its latest hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Number of Hedge Fund Investors: 193 Jim Cramer in a recent program on CNBC said major companies like NVIDIA Corporation (NASDAQ:NVDA) are seeing the effects of tariffs amid their huge exposure to China. Cramer believes the company is being 'punished' for doing business with the Asian country, which he believes is hostile to the US: 'I was working on my talk for the CNBC Investing Club last night, and it hit me like a bright bulb snapped on in a dark room. The real reason it is so hard for us to gain all these tariffs is that the company's now being punished. We're doing exactly what companies were supposed to do.' The market will keep punishing Nvidia for not coming up to its gigantic (and sometimes unrealistic) growth expectations. About 50% of the company's revenue comes from large cloud providers, which are rethinking their plans amid the DeepSeek launch and looking for low-cost chips. Nvidia is facing challenges at several levels. Competition is one of them. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC's 3nm capacity, which could limit Nvidia's access to these chips. Why? Because Nvidia also uses TSMC's 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offers alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia's offerings. Apple is reportedly working with Broadcom to develop an AI server processor. Intel is also trying hard to get back into the game with Jaguar Shores GPU, set to be produced on its 18A or 14A node. Here is how Cramer explained what NVIDIA Corp (NASDAQ:NVDA) is going through in the tariff wars: 'No country wants to be left behind by the industrial revolution, particularly one based on AI, right? And no country like China wants to be left behind. For Nvidia, China is the best kind of customer they could possibly have. I'm sure that China would happily buy huge numbers of chips. They'd probably buy all the chips. But what Nvidia didn't know was that it was selling its chips to an enemy nation. I don't blame them for not knowing because nobody knew, at least nobody was operating under the rules of either President Biden or the previous president, President Trump. China was very open for business under those two. Sure, in his first term, President Trump was no friend to the People's Republic of China, but he wasn't a rabid hater either. Then again, China did grow more opposition, although it's not like it was ever a secret that the PRC was an authoritarian dictatorship with global ambitions, sometimes antithetical to that of our own. Both parties now want to contain China.' Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 investor letter: 'NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. In our view, Nvidia's computational power is a critical enabler of AI and therefore essential to AI adoption. During the quarter, shares detracted from performance due to several factors. In January 2025, investor concerns grew regarding the emergence of advanced AI models from China, reportedly developed at lower costs and with reduced computing requirements, raising doubts about Nvidia's market dominance. Additionally, U.S. President Donald Trump's announcement of new tariffs targeting industries increased worries about higher operational costs. Despite these headwinds, Nvidia reported robust fiscal fourth-quarter results, highlighted by significant revenue growth driven by its data center segment. On the earnings call, CEO Jensen Huang emphasized the increasing computational requirements of future AI models, noting, 'The more computation, the more the model thinks, the smarter the answer,' and adding that future reasoning models could demand substantially more compute resources. We believe Nvidia's leadership in scaling AI infrastructure—including advancements in inference and reasoning during inference—continues to drive adoption among enterprises and startups, ensuring sustained demand for its high performance chips and software solutions. As older-generation chips are repurposed and new clusters deployed, we see Nvidia as well-positioned to capitalize on rising computational needs across AI applications.' Overall, NVDA ranks 2nd on our list of top buzzing stocks you should watch today. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
