After Nvidia and Apple, Alibaba Chases Vietnam: New Data Center to Boost Control and Meet Local Laws
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 01 2024
0mins
Should l Buy AMZN?
Source: Benzinga
- Alibaba Plans Data Center in Vietnam: Alibaba Group plans to build a data center in Vietnam to comply with local data storage laws and meet growing demand in the country.
- Tech Companies' Response to Vietnam's Data Storage Law: Major tech firms like Google and Amazon resisted Vietnam's law mandating data storage within the country.
- Alibaba's Data Storage Strategy: Alibaba uses colocation services from Vietnamese state-owned companies for local data storage while maintaining backups in other regions.
- Supply Chain Diversification in Vietnam: Companies like Nvidia, Apple, and Lam Research are looking to diversify their supply chain by investing in Vietnam amid US-China tensions.
- Stock Performance and Investment Options: Alibaba stock has declined, but investors can access it through ETFs like Invesco Golden Dragon China ETF and Tidal Trust II CoreValues Alpha Greater China Growth ETF.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy AMZN?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Amazon's Valuation at Historic Lows Amid Cloud Growth
- Valuation Analysis: Amazon's current forward P/E ratio stands at 32, which, while above last year's low of 24, remains historically low, indicating potential investment value for its stock amidst overall market underperformance.
- Cloud Revenue Growth: Amazon Web Services (AWS) achieved a 24% year-over-year growth last quarter, marking the fastest growth in over three years, suggesting that revenue acceleration for this segment may just be beginning, especially as the company invests heavily in AI infrastructure.
- Operating Leverage Improvement: Amazon's North American operating margin rose to 9% in Q4, up from 8% a year ago, driven by advancements in robotics and AI that significantly enhance e-commerce efficiency, resulting in a 24% increase in operating income.
- Chip Business Potential: Amazon's chip business currently has a revenue run rate of $20 billion, growing at triple-digit rates, with internal usage pushing it closer to a $50 billion business, which not only reduces capital expenditures but also enhances operating margins, showcasing its strong competitive edge in the AI sector.
See More
Amazon's E-commerce and Cloud Growth Drivers Amid Challenges
- E-commerce Efficiency Boost: Amazon enhances operational efficiency in its e-commerce segment through AI, automation, and robotics, achieving a 24% increase in North American operating income on a 10% revenue rise, showcasing its strong profitability in a low-margin business.
- Accelerating Cloud Revenue: Amazon Web Services (AWS) reported a 24% revenue growth last quarter, marking its highest growth rate in 13 quarters, indicating that its investments in data centers and market demand are allowing it to catch up with competitors.
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2023, a massive investment that will increase its debt load and lead to negative free cash flow, reflecting its ambition in expansion and technology investments.
- New Opportunities in Satellite Internet: Amazon's acquisition of Globalstar will provide the necessary spectrum and technology for its satellite internet business, accelerating its satellite launch plans and offering satellite connectivity for iPhones and Apple Watches, further expanding its market potential.
See More
S&P 500 Hits Record High as Oil Prices Plunge
- Strong Market Performance: The S&P 500 reached a new record high on Friday after Iran announced the Strait of Hormuz was 'completely open,' indicating a significant improvement in market sentiment, while oil prices fell over 10%, with WTI crude dropping to the low $80s, reflecting investor optimism about future economic recovery.
- Interest Rate Expectations Shift: The market is beginning to price in a 25-basis-point cut in December, indicating a reduction in investor concerns about economic slowdown, and the anticipated decline in rates is expected to further stimulate consumption and investment, driving stock market gains.
- Arm Holdings Strategic Shift: Arm recently unveiled its first in-house data center CPU, the AGI CPU, marking a significant transition from solely licensing to designing and selling its own chips, with projections of generating $25 billion in revenue by FY2031, $15 billion of which will come from these in-house chips, showcasing its ambitions in the semiconductor market.
- FedEx Spin-Off Plan: FedEx plans to spin off FedEx Freight on June 1, aiming to enhance the value of both companies through sharper strategic focus, with FedEx Freight being the largest LTL carrier in North America, and a medium-term revenue growth outlook of 4% to 6% expected to further strengthen its market competitiveness.
See More
Prospects for New Members of the $3 Trillion Club
- Amazon's Potential: As the fifth-largest company globally, Amazon needs to add approximately $400 billion to reach the $3 trillion mark; while this seems daunting, its cloud computing division, AWS, contributed 50% of operating profits in Q4, which is expected to drive its growth towards this goal before 2026.
- TSMC's Growth: With a market cap of $1.9 trillion, Taiwan Semiconductor is positioned second, playing a crucial role in AI chip manufacturing, with revenue growth of 37%, 22%, and 45% in January, February, and March respectively, indicating strong momentum that could propel it into the $3 trillion club in the coming years.
- Broadcom's Market Outlook: Broadcom is also excelling in the AI chip sector, projecting over $100 billion in custom AI chip revenue by the end of 2027; analysts forecast revenue growth of 63% this year and 50% next year, which could elevate its market cap from $1.8 trillion to $3 trillion.
- AI-Driven Industry Trends: With the rapid advancement of AI technology, companies like Amazon, TSMC, and Broadcom are actively positioning themselves, and through innovation and increasing market demand, they are expected to approach the $3 trillion valuation, becoming focal points for investors.
See More
US Stocks Rally as Oil Prices Plunge Amid Peace Talks
- Market Surge: The S&P 500 rose by 1.28% and the Nasdaq 100 reached an all-time high, reflecting investor optimism driven by peace talks between the US and Iran, which may enhance risk appetite and bolster overall market confidence.
- Oil Price Plunge: WTI crude oil prices fell over 13% to a five-week low after the Strait of Hormuz reopened, easing inflation concerns and causing the 10-year Treasury yield to drop by 8 basis points, further supporting the bond market.
- Earnings Growth Expectations: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only 3%, indicating resilience in corporate performance amid economic recovery and providing market support.
- Airline Stocks Soar: With reduced fuel costs, Alaska Air Group and United Airlines surged by over 14% and 11%, respectively, demonstrating the positive impact of falling oil prices on the airline industry, which could enhance profitability for related companies.
See More
Amazon MGM Extends Theatrical Run for Project Hail Mary
- Box Office Success: Project Hail Mary has grossed over $500 million in its first month, surpassing Gravity ($364M), The Martian ($374M), and Interstellar ($450M), establishing itself as the top-grossing film of 2026, indicating strong market appeal and viewer demand.
- Exclusive Theatrical Strategy: MGM's decision to extend the exclusive theatrical window for Project Hail Mary means it won't be available on streaming platforms soon, satisfying audience demand for big-screen viewing while potentially impacting subscription and revenue strategies for streaming services.
- IMAX Screening Opportunity: The film will have a limited run in IMAX theaters, enhancing the viewing experience and generating additional box office revenue for IMAX, reflecting the draw of high-quality film content for cinemas.
- Streaming Market Impact: With the extended theatrical release, streaming platforms like Amazon Prime and YouTube may need to adjust their content release strategies to meet viewer demand for new films, thereby affecting user growth and retention rates.
See More
Amazon's Valuation at Historic Lows Amid Cloud Growth
- Valuation Analysis: Amazon's current forward P/E ratio stands at 32, which, while above last year's low of 24, remains historically low, indicating potential investment value for its stock amidst overall market underperformance.
- Cloud Revenue Growth: Amazon Web Services (AWS) achieved a 24% year-over-year growth last quarter, marking the fastest growth in over three years, suggesting that revenue acceleration for this segment may just be beginning, especially as the company invests heavily in AI infrastructure.
- Operating Leverage Improvement: Amazon's North American operating margin rose to 9% in Q4, up from 8% a year ago, driven by advancements in robotics and AI that significantly enhance e-commerce efficiency, resulting in a 24% increase in operating income.
- Chip Business Potential: Amazon's chip business currently has a revenue run rate of $20 billion, growing at triple-digit rates, with internal usage pushing it closer to a $50 billion business, which not only reduces capital expenditures but also enhances operating margins, showcasing its strong competitive edge in the AI sector.
See More
Amazon's E-commerce and Cloud Growth Drivers Amid Challenges
- E-commerce Efficiency Boost: Amazon enhances operational efficiency in its e-commerce segment through AI, automation, and robotics, achieving a 24% increase in North American operating income on a 10% revenue rise, showcasing its strong profitability in a low-margin business.
- Accelerating Cloud Revenue: Amazon Web Services (AWS) reported a 24% revenue growth last quarter, marking its highest growth rate in 13 quarters, indicating that its investments in data centers and market demand are allowing it to catch up with competitors.
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2023, a massive investment that will increase its debt load and lead to negative free cash flow, reflecting its ambition in expansion and technology investments.
- New Opportunities in Satellite Internet: Amazon's acquisition of Globalstar will provide the necessary spectrum and technology for its satellite internet business, accelerating its satellite launch plans and offering satellite connectivity for iPhones and Apple Watches, further expanding its market potential.
See More
S&P 500 Hits Record High as Oil Prices Plunge
- Strong Market Performance: The S&P 500 reached a new record high on Friday after Iran announced the Strait of Hormuz was 'completely open,' indicating a significant improvement in market sentiment, while oil prices fell over 10%, with WTI crude dropping to the low $80s, reflecting investor optimism about future economic recovery.
- Interest Rate Expectations Shift: The market is beginning to price in a 25-basis-point cut in December, indicating a reduction in investor concerns about economic slowdown, and the anticipated decline in rates is expected to further stimulate consumption and investment, driving stock market gains.
- Arm Holdings Strategic Shift: Arm recently unveiled its first in-house data center CPU, the AGI CPU, marking a significant transition from solely licensing to designing and selling its own chips, with projections of generating $25 billion in revenue by FY2031, $15 billion of which will come from these in-house chips, showcasing its ambitions in the semiconductor market.
- FedEx Spin-Off Plan: FedEx plans to spin off FedEx Freight on June 1, aiming to enhance the value of both companies through sharper strategic focus, with FedEx Freight being the largest LTL carrier in North America, and a medium-term revenue growth outlook of 4% to 6% expected to further strengthen its market competitiveness.
See More
Prospects for New Members of the $3 Trillion Club
- Amazon's Potential: As the fifth-largest company globally, Amazon needs to add approximately $400 billion to reach the $3 trillion mark; while this seems daunting, its cloud computing division, AWS, contributed 50% of operating profits in Q4, which is expected to drive its growth towards this goal before 2026.
- TSMC's Growth: With a market cap of $1.9 trillion, Taiwan Semiconductor is positioned second, playing a crucial role in AI chip manufacturing, with revenue growth of 37%, 22%, and 45% in January, February, and March respectively, indicating strong momentum that could propel it into the $3 trillion club in the coming years.
- Broadcom's Market Outlook: Broadcom is also excelling in the AI chip sector, projecting over $100 billion in custom AI chip revenue by the end of 2027; analysts forecast revenue growth of 63% this year and 50% next year, which could elevate its market cap from $1.8 trillion to $3 trillion.
- AI-Driven Industry Trends: With the rapid advancement of AI technology, companies like Amazon, TSMC, and Broadcom are actively positioning themselves, and through innovation and increasing market demand, they are expected to approach the $3 trillion valuation, becoming focal points for investors.
See More
US Stocks Rally as Oil Prices Plunge Amid Peace Talks
- Market Surge: The S&P 500 rose by 1.28% and the Nasdaq 100 reached an all-time high, reflecting investor optimism driven by peace talks between the US and Iran, which may enhance risk appetite and bolster overall market confidence.
- Oil Price Plunge: WTI crude oil prices fell over 13% to a five-week low after the Strait of Hormuz reopened, easing inflation concerns and causing the 10-year Treasury yield to drop by 8 basis points, further supporting the bond market.
- Earnings Growth Expectations: Q1 earnings for the S&P 500 are projected to increase by 12% year-over-year, although excluding the tech sector, growth is only 3%, indicating resilience in corporate performance amid economic recovery and providing market support.
- Airline Stocks Soar: With reduced fuel costs, Alaska Air Group and United Airlines surged by over 14% and 11%, respectively, demonstrating the positive impact of falling oil prices on the airline industry, which could enhance profitability for related companies.
See More
Amazon MGM Extends Theatrical Run for Project Hail Mary
- Box Office Success: Project Hail Mary has grossed over $500 million in its first month, surpassing Gravity ($364M), The Martian ($374M), and Interstellar ($450M), establishing itself as the top-grossing film of 2026, indicating strong market appeal and viewer demand.
- Exclusive Theatrical Strategy: MGM's decision to extend the exclusive theatrical window for Project Hail Mary means it won't be available on streaming platforms soon, satisfying audience demand for big-screen viewing while potentially impacting subscription and revenue strategies for streaming services.
- IMAX Screening Opportunity: The film will have a limited run in IMAX theaters, enhancing the viewing experience and generating additional box office revenue for IMAX, reflecting the draw of high-quality film content for cinemas.
- Streaming Market Impact: With the extended theatrical release, streaming platforms like Amazon Prime and YouTube may need to adjust their content release strategies to meet viewer demand for new films, thereby affecting user growth and retention rates.
See More
