| | | | GOOGL, MSFT, META and FOMC in 1 Day?!
First, don’t miss today’s Daily Chart Setup trade idea down lower in this newsletter.
We have FOMC at 2 p.m. ET, where we find out if they cut the rate once again. Then, after the close, we get GOOGL, META and MSFT reporting earnings...
Come join me as we dive in and see what’s moving!
Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day.
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AWS Losing the Cloud War: Microsoft Azure and Google Cloud Are Crushing Amazon
Before we get to it, today’s Daily Chart Signal has a historical profit factor of 21.497, and it’s in…
What a coincidence — Amazon! Scroll on down for the signal and setup after you read the following…
When giants stumble, smart traders pay attention.
Amazon (AMZN) has been shedding thousands of jobs across its operations, and while most people see cost-cutting headlines, I see something more interesting brewing beneath the surface.
The cracks are forming in what used to be Amazon's invincible cash cow — Amazon Web Services.
For years, AWS has been the engine driving Amazon's growth story. The undisputed king of cloud computing. But here's the thing about being king — everybody guns for you.
And right now, AWS only grew 17.5% last quarter. That might sound impressive until you look at the competition.
Microsoft (MSFT) Azure surged 39% while Google (GOOGL) Cloud jumped 32%. Amazon's rivals aren't just nipping at its heels anymore — they're eating its lunch.
Notably, Microsoft has been aggressively expanding its AI capabilities, which has significantly contributed to its cloud growth.
The profit picture tells the same story. AWS profit margins hit a record high of almost 40% earlier this year, but by the second quarter, they fell to 33%.
That's the wrong direction, folks.
This decline is partly due to increased investments in infrastructure and AI technology, which are crucial for maintaining long-term competitiveness.
The Stock Performance Gap Nobody's Talking About
Here's where it gets really interesting for traders like us.
This year through Tuesday, the S&P 500 is up 17%, MSFT is up 28%, and GOOG/GOOGL has surged 40%.
AMZN? A measly 3%, possibly even going negative before long. It’s almost been sitting still as Amazon has been the worst-performing stock in the entire Magnificent Seven.
The money flow is crystal clear. Azure just crossed $75 billion in annual revenue, growing nearly 40%. Google Cloud is printing money with 32% growth and profit margins that have doubled.
If you're looking where the smart money is flowing in the cloud space, it's not pointing to Seattle right now.
That's investment opportunity No. 1 — ride the momentum in Microsoft and Google. They're winning the AI cloud war, and their stock prices reflect it. Google's strategic partnerships with major corporations have also bolstered its cloud offerings, making it a formidable competitor.
The Contrarian Play That Could Pay Off Big
But here's opportunity No. 2, and it's the riskier bet — the contrarian play on Amazon itself.
Is it time to count Amazon out? Not so fast…
Analysts like those at KeyBank believe investors are completely undervaluing Amazon's AI potential. They see a world where all these job cuts and efficiency gains lead to a leaner, meaner Amazon that finally figures out its AI strategy.
They're putting a price target on the stock that suggests a 30% jump from current levels.
It's definitely a risky bet — you're betting on a comeback story. But if CEO Andy Jassy can actually pull it off, the payoff could be massive. After all, Amazon is still the cloud market leader with over 30% market share.
A lot of critical infrastructure runs on AWS, as we all found out during the recent internet hiccup.
So you've got two plays here: Chase the momentum in Microsoft and Google, or take the contrarian bet on Amazon's turnaround.
The setup is there. The data is clear. Now it's up to you to decide which side of this cloud war you want to be on.
Now be sure to join me live at 9:15 a.m. ET for “Morning Monster,” my market-open livestream on YouTube!
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