4Q20 results at a glance
4 Takeaways from 4Q20 Earnings Call
With ongoing restrictions, we expect stay-at-home demand to continue supporting net sales in its international markets. In its 1Q21 guidance, AMZN has assumed about US$2bn of COVID-related costs, lower than the US$4bn in 4Q20. We believe that as normalcy returns, a further easing of COVID-related costs may lift margins over the next 1-2 years.
Round-up
Still, we remain Neutral on AMZN. We believe demand for its cloud services will grow by mid-20% on the back of an improving economy, which may drive corporate spending on IT infrastructure. Ongoing stay-at-home restrictions and stimulus payments by the Biden administration may also support growth into 1H21. However, as normalcy accelerates in 2H21, YoY growth could slow from its high base in 2020 when there were widespread lockdowns.
Jun Rong currently covers the U.S market, with focus on FAANG stocks. Previously an investment specialist, he constantly keeps in touch with the latest market trends to serve the needs of clients. Jun Rong also features in different media platforms such as Channel 8’s Morning Express show and provides market commentary for various newspaper like LianHe ZaoBao (联合早报) and Business Times. Jun Rong graduated from National University of Singapore (NUS) in 2017 with a Bachelor of Social Sciences with major in Economics.