Amazon Shares Soar on Cloud Growth
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What is the main topic discussed in this episode?
Hello and welcome. This is The Michelle Hussein Show. I'm Michelle Hussein. I speak with people like Elon Musk.
I think I've done enough.
And Shonda Rhimes. That's so cute. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe to The Michelle Hussein Show from Bloomberg Weekend, wherever you get your podcasts.
You certainly ask interesting questions.
Bloomberg Audio Studios. Podcasts. Radio. News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
This is Bloomberg Tech coming up. Tech earnings bonanza. Apple, Amazon, also Reddit and Twilio will break them all down with experts and their C-suite. Plus, NVIDIA CEO Jensen Wang still hopes to sell its Blackwell chips to customers in China. We'll discuss that and a flurry of Korean deals. And we sit down with CoreWeave CEO Michael Entredge to talk AI infrastructure after a failed takeover bid for Core Scientific. But first, we check in on these markets, which... are not quite at a record high. But we're back up and to the right when it comes on the day. We're looking at the AI bubble back in focus, but AI boom really what's driving these stocks higher over the course of the week. We shrug off government shutdown.
We're putting to one side geopolitical risks. We're up 2.6% on the NASDAQ 100 for this week alone. Let's move into what's happened on an individual basis. And the key story of the day is Amazon. Look, we are at a new record high. We're up almost 11% for this particular company. And this is as they show that AWS cloud growth is back on top. It's a bitter pill for many to swallow who have lost their roles at this particular company. Remember, we started the week talking about 14,000 jobs to go. Let's dig into all of that at the moment because I'm pleased to say Brad Erickson is here with us. RBC Capital Markets. He's, of course, a key internet analyst there. And you've still got an outperform rating on the stock.
You think the price could go higher from where we are. Currently, 10.8%.
What are the latest earnings results for Amazon and how did investors respond?
You see it hitting 300. Brad, just talk us through what you liked in the numbers.
Yeah, I think obviously the reacceleration to 20% on AWS in Q3 was like the headline critical metric they had to do. They did it. And so that really got the stock going. And then I think as you think about going forward, they're getting this capacity deployed faster than we would have thought maybe a quarter ago. And they gave some nice detail around some of the power, the gigawatts that they've been able to deploy and some forward commentary there. And it just comes down to kind of simple math. They're not saying they're going to accelerate necessarily on AWS, but if you do the math, it implies that they probably will. And that means there's probably a lot of upside to street numbers. And so that was the point we were making in our note.
I mean, 3.8 gigawatts is massive when you think about each gigawatt, potentially up to a million homes. That's how much they put on in the last 12 months. What are you making of the vertical integration here as well? The fact that they're saying that their Tranium chips are already a multi-billion dollar company. How much does that build to future revenues?
Yeah, you know, Tranium, to go with your second part first, Tranium 2 is largely being used for Anthropic, which is kind of the major enterprise player in the generative AI space.
What are the implications of Nvidia's Blackwell chip sales in China?
They're going to continue to grow a lot. They're going to double the number of chips at the Rainier site by the end of the year. So it's exciting. That is going to continue to scale up and drive a ton of revenue growth, and it is material to next year, and this is a $130 billion business, so it gives you a sense. In terms of just taking vertically integrating, it's massively important. The power grid is not set up for these data centers, and they have massive needs, massive cooling needs, massive water needs. And so it has and will always likely continue to make sense for these guys to make sure they can do that on their own or at least become less tied to third parties.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–2:11
2
What are the latest earnings results for Amazon and how did investors respond?
2:11–3:35
3
What are the implications of Nvidia's Blackwell chip sales in China?
3:35–6:43
4
How is AWS cloud growth impacting Amazon's stock performance?
6:43–8:37
5
What insights did RBC Capital Markets provide about Amazon's future?
8:37–20:15
6
How are corporate layoffs at Amazon related to generative AI?
20:15–26:59
7
What factors contributed to Apple's recent earnings and stock fluctuations?
26:59–45:32
Speakers
10 identifiedMore from Bloomberg Tech
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