AWS, advertising, efficiency drive strong profits
Q2 op profit grew almost fivefold as AWS and advertising both exceeded expectations and Amazon drove efficiencies in its ecommerce operation. Sales growth did slow in ecommerce, causing revenue to miss for Q2 and Q3 guidance, but we do not see any structural change to the company's longer term competitive position, particularly given AWS & advertising are increasingly enabling Amazon to invest aggressively whilst also delivering strong profit growth. Our YE18 PT goes to $2,050 from $1,900.Amazon.com serves consumers through its online and physical stores. The company also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, and Ring, and the company develops and produces media content. The company operates customer service centers and provides programs that enable sellers to grow their businesses, sell their products in its stores, and fulfill orders through the company The company serves developers and enterprises of various sizes, including start-ups, government agencies, and academic institutions, through its Amazon Web Services segment, which provides a set of global compute, storage, database, and other service offerings. The company also provides services, such as advertising.
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