Tech plays like Amazon.com Inc. are the hottest thing on the market right now, not only because of their seemingly infinite growth potential in a low-growth world, but also perhaps because of the halo of youthful, entrepreneurial success they cast on their owners. Yet despite an ostensibly successful 4QFY2020 ended December, PhilipCapital has maintained a contrarian “neutral” call on Amazon. 

And this has nothing to do with the shock departure of founder Jeff Bezos from the CEO position. “We do not foresee any material impact on Amazon . Rather, we are positive as the move underscores Amazon’s ongoing pivot to its Amazon Web Services (AWS) segment,” notes the research house in a Feb 5 broker’s report. AWS is Amazon’s cloud computing arm. 

AWS is the jewel in the Amazon crown despite its slowing y-o-y growth for ten successive quarters. It accounted for slightly more than one-tenth of Amazon’s 4QFY2020 revenue, up from 6.7% in 2015. It delivered an eye-popping 60% operating profit, with a 28% operating margin that towers over all other business segments. 


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