AMZN, Jassy, and breaking up with Yipit for a day
I wrote up my thoughts AMZN here last night and not much new to add to the #s – eps estimates going up msd to hsd across the street on better op inc #s while rev guide was a bit weak. Stock trading at 10x 2024 EBITDA.
But what’s the narrative coming out of the print? We usually express a narrative in words: acceleration/deceleration…upside to #s…share gains…pricing leverage, etc.
But I sense the narrative coming out of the print yesterday was more about a feeling.
Why do narratives in tech take on such importance vs. other industries? Because they can become extremely powerful when attached to a feeling.
Tech is the industry of extraordinary large TAMs. Where software is eating the world.
A place where an app can grow to 100M users in 5 days. A space where excitement about a narrative can drive a stock to 20x sales in several months and fear about a story can pummel a stock to 6x P/E. We can dream big dreams in tech faster than any other place in the market.
We are masters of extrapolation and exponential curves!
The feeling heading into the AMZN print was one of frustration and exhaustion.
Us tech market participants had created an awful dream where we were beholden to the great Lord Yipit in a stock with one of the best long-term stories in Tech. One where we had forgotten about the power of Log.
What was the latest Yipit datapoint? Was it 11% or 11.5%? Did it accel 30 bps or 50 bps at the beginning of Oct? Will AWS accel to 13% or 14% next month?
Let’s put the kids to bed early today honey – tomorrow is Thursday and I have to wake up at 4am to catch the latest Yipit Live Cloud datapt before anyone else does.
I like the game as much as the next guy, but The Great Lord Yipit really has a way of sucking the fun out of investing…
Time frames compressed to next Thursday morning…heightened volatility…narratives focused on 4am alt data prints.
But finally! the market closes yesterday after a week of red…AMZN reports…great op inc…good aws #...12%... stock +5%...
CFO gets on CNBC – oh no AWS hasn’t bottomed, stock now red…
Then our hero Jassy rides into the call with a new dream: this Lord Yipit is a fraud! he says…
”attenuate”…”attenuate”…”attenuate”
”the collection of which is higher than our total reported deal volume for all of Q3”…”very optimistic about AWS over the long-term”…”more customers are shfting focus to innovation & new workloads.”…
“new Gen AI opportunity will be tens of billions of dollars in revenue for AWS over the next several years”…
“If you think about 90% plus of the global IT spend being on premises, where I think that equation is going to flip in 10 years”…
We nod. We smile. We breathe a collective *sigh of relief*
We look back at our old jaunt with Yipit.
Oh no, that was so…embarrassing... What did I ever see in her? My long duration friends were right: I should have broken up her a long time ago. Our friend Jassey is so much better for us long-term. We can raise a portfolio with him. We can trust him…
That’s the feeling coming out the print: A collective *sigh of relief*. A focus on ’24 and ’25 and beyond, not the accel/decel of AWS in Q4.
Last night, Jassy did enough to shift the dream to his.
For maybe just one day, even the pod crew is seeing as clear as the long duration guys this morning…
…But Lord Yipit waits in the shadows, beckoning with the latest greatest cloud datapt. The watchful eye of Griffin, Dmitry and Izzy ready to remind our pod friends that the shoulder tap still exists. Don’t buy the Jassey hype, they say.
You need to feed our machine with the latest datapt, they remind them. If not, the machine stops feeding you…
RIVN ug at Cantor, 3p +ve on SHOP/neg on ETSY
I mentioned yesterday in the chat I had moved to a net neutral QQQ position ahead of the AMZN print. I am still cautious on the QQQs and look to reengage the short on any rips. I’ll have more this wkend. See you then!
You are a good fiction writer!
What do you mean by the power of Log in this context? That AMZN growth exponential?