Today’s action for cloud companies was finally starting a bounce back with positive results on MSFT showing cloud growth not slowing. But now today AMZN reported and it’s cloud growth has slowed considerably below analysts estimates. I’m wondering if the cloud stocks will get hammered again tomorrow with this negative outlook vs MSFT’s positive outlook
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It sounds like something that would bring cloud related stocks down, but the news about AWS was released well before after hours ended, and the stocks I checked were flat after hours.
Aside from certain companies such as NTNX and possibly ZS related to O365 adaption, I dont equate the stocks I have to something that needs cloud titans to continue to grow.
I say just ask yourself how Alteryx would be impacted by cloud titan growth/slowdown.
That’s how I’ve been operating. Each SaaS category is going to have its own S-Curve.
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But now today AMZN reported and it’s cloud growth has slowed considerably below analysts estimates
Keep in mind AWS did $9.0 Billion (with a B) this quarter, so that’s a $36B run rate and they still grew at 35%. That’s a huge amount of new business moving to the cloud every quarter and a giant amount of new, growing, opportunity for the smaller SaaS companies.
If most of our companies are still growing at 35% when they reach $3 billion annually (or $750m/quarter) a few years from now, those of us with large SaaS holdings will have done very very well.
Analyst estimates were $9.1 Billion for AWS, so only a 1% miss. Amazon’s stock is mainly down due to an earnings miss, largely due to their continuing to invest in new distribution centers to grow, and a lower than expected Q4 guidance, which has more to do with their retail business than AWS.
We’ll really get a feel for how things are going as our companies start to report over the next few weeks.
-mekong
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“We’ll really get a feel for how things are going as our companies start to report over the next few weeks.”
Ahead of that, we’ll get another excellent indicator on Monday after Google reports. Google has been grabbing cloud share rapidly in recent quarters and i’m betting on another upside surprise.
Interesting to me that ANET bounced nicely in the wake of AMZN cloud deceleration.
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