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Amazon Down

Amazon (AMZN) recently reported Q2 EPS of $1.68 and Q2 revenue $167.7 billion, both above consensus of $1.33 and $162.11 billion, respectively. Andy Jassy, President and CEO of Amazon, stated the following: 

"Our conviction that AI will change every customer experience is starting to play out as we've expanded Alexa+ to millions of customers, continue to see our shopping agent used by many millions of customers, launched AI models like DeepFleet that optimize productivity paths for our 1M+ robots, made it much easier for software developers to write code with Kiro (our new agentic IDE), launched Strands to make it easier to build AI agents, and released Bedrock AgentCore to enable agents to be operated securely and scalably. Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I'm excited for what lies ahead."

Despite beating on the top and bottom lines in Q2 and offering a better-than-expected Q3 revenue outlook of $174-$179.5 billion, the stock underperformed, which analysts said could be related to the company's guidance for operating income of $15.5-$20.5 billion for Q3, which was worse at the midpoint than the expected $19.5 billion.

Following the report, RBC Capital raised the firm's price target on Amazon.com to $240 from $230 and kept an Outperform rating on the shares. The company had a mixed print and an even tougher conference call, the analyst told investors in a research note.

Positively, the retail business is firing on most if not all cylinders, but at AWS, growth didn't really accelerate like peers, margins missed, and management's commentary on the call did little to attenuate investor fears that AWS may have a bigger structural issue in capturing its fair share of the growth from AI, RBC added.

In its own post-earnings note, Stifel lowered the firm's price target on Amazon to $260 from $262 and kept a Buy rating on the shares. Corporate-level Q2 results were "very healthy," with revenue and operating income both above the high-end of the guided range, while Q3 guidance was "mixed," with revenue ahead of expectations and lighter-than-expected operating income, the analyst told investors.

However, stable revenue growth at AWS was a disappointment after heightened expectations heading into the print, with Microsoft's (MSFT) Azure and Google's (GOOGL) GCP both posting about 400 basis points of acceleration this past quarter, the analyst added.

CEO Jassy Sez. Jassy additionally said the following: 

"Automation and robotics are also important contributors to improving cost efficiencies and driving better customer experiences over time. We deployed our one millionth robot across our global fulfillment network and unveiled innovations at our last mile innovation center, such as automated package sorting and a transfer transformative technology that brings packages directly...

We rolled out Deepfleet; our AI moves robot travel efficiency by 10% At our scale, that's a big deal. Deepfleet acts like a traffic management system to coordinate robots' movements to find optimal paths and reduce bottlenecks. For customers, it means faster delivery times and lower costs. For our team members, our robots handle more of the physically demanding tasks making our operations network even safer. This combination of robotics and generative AI is just getting started, And while we've made significant progress, it's still early respect to what we'll roll out in the next few years."

Vast Data

Alphabet's growth-stage venture arm CapitalG and Nvidia (NVDA) are in talks to invest in artificial intelligence infrastructure provider Vast Data in a new funding round that could value the startup as high as $30 billion, two sources said, Reuters' Krystal Hu, Max A. Cherney, and Milana Vinn reported.

The startup is raising several billion dollars from tech giants, private equity, and venture capital investors, which could make it one of the most valuable AI startups, the two sources with knowledge of the matter said, as companies building the backbone for the AI boom come into sharper focus.

Buy: Rezolve AI

Alliance Global Partners initiated coverage of Rezolve AI (RZLV) with a Buy rating and a price target of $8.50. The firm's contacts indicated Rezolve AI's conversational artificial intelligence technology is among the two or three best technologies focused on e-commerce.

The company has already signed enough new business to exit the year at a $70 million annual revenue run rate, Alliance Global told investors in a research note. Online retail will benefit from AI and Rezolve is positioned to capitalize on this "mega trend," contended the firm.

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