Tennis isn’t just a game to Andy Jassy.
The Amazon (AMZN) CEO, who was a star player in high school, learned some important lessons on the court.
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“Tennis is very much a meritocracy,” he once said. “There’s no favoritism, there’s no politics. You either win or lose based on how you perform in the moment.”
Jassy has been with the e-commerce and entertainment giant for nearly three decades, after taking his last final exam at Harvard Business School on the last Friday in May 1997 and starting at Amazon the following Monday.
“No, I didn’t know what my job was going to be, or what my title was going to be,” he said.
No matter. Jassy quickly got a grip on the internet racket as he applied another lesson from the game of kings.
“Tennis taught me what happens when you really work on something, and what happens when you don’t,” he declared.
Amazon CEO Andy Jassy.
Amazon Web Services beats Wall Street’s estimates
In 2003, Jassy and Amazon founder and then-CEO Jeff Bezos came up with the cloud computing platform that would launch in 2006 as Amazon Web Services.
Jassy led the group with a team of 57 people and a decade later, the Financial Times named him the Person of the Year. He was promoted to CEO of AWS a short time later.
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AWS has grown considerably since those early days and Jassy, who became Amazon’s CEO in July 2021, discussed the platform’s success with analysts during the company’s first-quarter earnings call on April 30.
Amazon Web Services posted quarterly revenue of $25 billion, up 17% year-over-year, beating Wall Street’s estimates of $24.5 billion.
“We remain very bullish on AWS,” he said. “The more demand AWS has, the more we have to procure new data centers, power and hardware.”
Amazon, which will mark its 30th anniversary on July 5, is reportedly planning to spend over $100 billion over the next decade on data centers, which means the company is now devoting more investment money to its cloud computing and AI infrastructure than its network of e-commerce warehouses, The Wall Street Journal reported on June 30.
AWS has opened data centers for years, but executives said there has been a surge in investment due to the excitement around AI.
TheStreet Pro’s Stephen Guilfoyle has been tracking Amazon and some of the analysts who cover it.
“I know that you’re watching Amazon,” he wrote in his July 2 column. “Is the stock finally breaking out for CEO Andy Jassy? My answer would be a definite … maybe.”
Guilfoyle, who added that “my dollars say that I am long the shares,” noted that on July 1, “two highly rated sell-side analysts opined on Amazon out of nowhere.”
First, Brian White of Monness, Crespi, Hardt & Co., reiterated his “buy” rating on Amazon along with his $225 target.
“White is rated five-stars by TipRanks, and I know [him] to be a sharp analyst, though I have disagreed with him on Palantir Technologies (PLTR) in the past,” Guilfoyle said.
Analyst notes shift in cloud spending
Joe Feldman of Telsey Advisory, who is also rated five stars, reiterated his “buy” rating on the shares along with his target price of $215.
And on June 28, Ken Gawrelski of Wells Fargo, who’s rated 4.5 stars, took over coverage of Amazon for his firm and reaffirmed the buy rating, while increasing the target price from $234 to $239. Gawrelski, at that time, named Amazon as his “signature pick.”
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Last month, Matt Garman, whom Jassy recruited out of business school, became the CEO of AWS, replacing Adam Selipsky.
Wells Fargo said that it sees another beat and raise quarter coming for the e-commerce giant, adding that the firm feels that AWS commentary is “key” following the leadership change.
“You may have seen other analysts stating their opinion, as well,” Guilfoyle told readers. “Unless there is very little coverage of a name, I do not use analysts rated below four stars by TipRanks as part of my information input.”
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Another five-star-rated analyst, James Lee of Mizuho Securities, rated Amazon outperform with a $240 price target.
Guilfoyle said that Mizuho had conducted a survey that showed an accelerated sales cycle for AWS.
“The survey also showed that the shift in spending on the cloud has shifted toward infrastructure, which implies that the pipeline for workload upgrades to databases remains strong and perhaps suggests an increased move into AI,” he said.
In addition, the survey found that corporate projects related to generative AI as being close to an inflection point, where external models could be roughly six months from being commercially deployed.
“This is also a likely plus for the likes of Microsoft (MSFT) and perhaps Alphabet (GOOGL) and Oracle (ORCL) ,” said Guilfoyle, who has a $230 price target on Amazon.
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