Amazon.com, Inc. (AMZN)’s Results are Disappointing: Julian Emanuel

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Amazon.com, Inc. (NASDAQ:AMZN) missed the analysts expectation for a second straight quarter, which is testing the patience of the investors. The company reported a loss of $126 million for the quarter, which was more than double the predictions. The company sales increased by 23% to $19.3 billion, but, on the other hand, expenses also have increased by 24% to $19.4 billion.

Amazon.com, Inc. (NASDAQ:AMZN)’s profits were dragged down by the investments that they made in the Cloud computing, warehouses and gadgets like the new Fire Phone. Investors held on to Amazon, hoping that all these projects would fetch long-term benefit, but now they seek some evidence of long-term growth from the company.  Julian Emanuel, U.S. Equity and Derivatives Strategist at UBS talked on Bloomberg TV about the tech companies’ investments and strategic plans.

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All the top tech companies, including Amazon.com, Inc. (NASDAQ:AMZN), keep pouring a lot of investments in Cloud computing. Investors start to wonder if there is a limit to this. Emanuel feels that the Cloud computing is still not fully matured and it can influence the markets more in the coming days.

He thinks that the Cloud computing will reshape the world someday, as the companies like Amazon reshaped the world in late 1990’s and early 2000’s.

“But what I would say is, you look at the share price reaction today and what we are seeing is disappointment, when earnings don’t meet expectations. That’s an issue,” he said.

Amazon.com, Inc. (NASDAQ:AMZN) and other tech companies build their strategic plan, hoping that the market would accept their products, but when the market don’t, investors start questioning the strategic plan. Amazon is facing some similar concern at the moment. Emanuel also feels that the Amazon’s strategic plan was killed by the market.

Federal Reserve Chair, Janet Yellen, has also said that the social media and biotechnology stocks are overvalued. Emanuel thinks that the Yellen’s statement was appropriate.


Disclosure: None

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