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00:00Colin Sebastian, senior research analyst over at Baird. Joining us right now, he has an outperform rating on the stock and a one twenty five price target. Colin, this seems to be the juggernaut out there that can do no wrong. What are you expecting after the bell tonight? What's the highlight for you? Yeah. Hi, Romaine. Thanks for having me. I think, you know, given all the crosscurrents right now within technology, within consumer Internet, what we're looking for is is signs of the e-commerce business showing stability. That's what we saw from Alphabet and from Metta in their own businesses that we'd like to see that for Amazon on the consumer side as well. I'd say there's a little more concern on the enterprise side of Amazon NWS and what the growth rate there looks like is as I.T. budgets are getting cut in this macro environment. So I think those are the highlights that we'll be looking for. Do you anticipate that we could see additional cost cutting beyond what the company has already announced? Yes, over time we do. I mean, in terms of productivity, in terms of how count I think across the board, not just Amazon, but but with other companies there. There were there was such an over hiring phase during the pandemic. It's going to take time to to right size those operations. Plus, you have this newer dynamic of artificial intelligence and machine learning, offering ways to improve productivity. So whether or not we hear this on a conference call with Amazon today, we do think there will be a multi-year period where headcounts and other operating expenses are rationalized. What's the balance when it comes when it comes to A.I. and how these companies integrate that both whether it's on the client facing side or just dealing with their own internal procedures here? How, I guess realistic is that right now as an application or is it just more just the strategizing and sort of planting the seeds for something that still could be years down the road? Yeah, it's a really a great question. I think that's that's exactly what companies are wrestling with right now. The balance between how does productivity for me, I allow cost cutting versus how much should be invested in these companies for product development, as you suggest, and other infrastructure. So short term, we're gonna see this cost cutting. Longer term, we're gonna see ramping investments in A.I. as companies seek to get more intelligence out of their data as they create products using using generative A.I.. It's a big multiyear wave in technology that everyone woke up to with this Chachi Beatty craze. It's more of a sprint now than a marathon where it was perhaps in years past. I do want to talk about the e-commerce business. I mean, as much as we talk about ADA of the U.S. and all these other cool things that Amazon is doing, it's still a company that is still largely dependent with at least on the revenue side from the online store. And I guess you could though in the third party selling as well. Q Do you anticipate that we could see any material growth out of those businesses this year? Well, I think what's happening in e-commerce is that slowly we're seeing the normalization of spend, a lot of discretionary spend has moved to travel and experiences out of home investments or spend. We will start to see that move back to goods and other services that that are really more e-commerce driven. And as that happens, Amazon will benefit from that, not just here domestically, but but globally as well. And that additional scale will then feed into better profitability, we think, for Amazon. You only have about a minute left. I do want to get your thoughts just on the device side. We've seen a lot of the cost cutting appears to be tied to that unit. I think just yesterday we reported basically them kind of killing off the Halo project here. Do you think that they need to continue to do that or is there a space in Amazon's overall strategy that can include a device business? Well, I think what Amazon has discovered over time is that their core competency is in software and services, not in hardware. And there are exceptions to that. But but services like Alexa write that that can be integrated with a whole range of devices about Amazon actually building, designing, building and manufacturing a device itself. I do think as Andy Jassi becomes more disciplined about which projects are in focus, you will see them become a little bit more picky about which hardware, which devices that they control internally. I think you'll see Amazon moved to support more devices across operating systems across the ecosystem.

Top Calls: AWS Sales Growth Slows to Record Low

Colin Sebastian, Baird Sr. Research Analyst joins Romaine Bostick to discuss the big movers on the back of analyst recommendations on Bloomberg Markets: The Close. (Source: Bloomberg)

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