Nasdaq AMZN Amazon

Amazon’s ( AMZN ) latest cost cutting initiative will see the company let go of more than 18,000 employees. Amongst the company’s segments, the Devices, Stores and People, Experience and Technology (PXT) teams will all badly affected by the company’s attempt to rein in expenses against a backdrop of worsening macro conditions. The extent of the cull in some segments has puzzled Morgan Stanley’s Brian Nowak. “Notably and somewhat surprisingly, a majority of the role eliminations will come in the Stores and PXT teams. We expected a significant amount of discipline in the Devices/Alexa teams, which we believe make up a majority of the estimated $10bn-15bn in AMZN's ‘Other Bets’ investment projects we have detailed the past,” Nowak opined In any case, Nowak reckons the headcount reduction will result in annual savings of ~$3.6 billion and add 13% to his 2024 EBIT forecast. “This is an important step,” he went on to say, “but we look for even more discipline on AMZN's $10-$15bn of non-core spend.” The cut to the workforce (and hiring freeze) should also have a positive effect on SBC (stock-based compensation) which could now be “significantly lower” in 2023/2024. Setting aside the harsh reality of 18,000 employees losing their jobs, Nowak thinks the cuts are “important symbolically,” and demonstrate another tech company taking hard but needed decisions on how to “better manage cash flow” against a backdrop of a “potentially more challenging” 2023/2024. At the same time, the company is expected to keep on investing so to hold on to its market leading position. All told, Nowak reiterated an Overweight (i.e., Buy) rating on AMZN, backed by a $140 price target. Should the figure be met, investors will be sitting on returns of ~56% a year from now. (To watch Nowak’s track record, click here ) Elsewhere on Wall Street, AMZN receives an additional 35 Buys, countered by just 3 Holds and all coalescing to a Strong Buy consensus rating. Going by the $137.85 average target, the shares have room for 12-month growth of 53%. ( See Amazon stock forecast on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’  Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Microsoft (NASDAQ: MSFT) is in talks to invest $10 billion in OpenAI, the owner of ChatGTP. Here is a breakdown of the news, what it means for Microsoft stock, and how it could affect competitors like Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN).

U.S. stocks ended solidly higher on Tuesday, led by a 1% gain in the Nasdaq, on relief that Federal Reserve Chair Jerome Powell refrained in a speech from commenting on rate policy.

Cloud-based software company Salesforce ( NYSE:CRM ) and e-commerce giant Amazon ( NASDAQ:AMZN ) have one thing in common. Last week, both companies announced layoffs and have gained back investors' interest driven by hopes of better margins in the future. Cost-control initiatives, indeed, are the need of the hour for these tech companies that can foresee revenue growth dipping further in the coming months. The layoffs of the tech industry that began in 2022 are continuing in 2023. The pandemic boom has subsided, and the economic downturn hints at even lower revenues in the coming quarters. In these uncertain times, however, layoffs can be a good thing. Let’s take a deeper look at CRM and AMZN. Salesforce ( NYSE:CRM)  Once an outperformer during the pandemic, CRM stock has come full circle, now trading near pre-pandemic levels. Citing a challenging macro environment and an inherent business slowdown, Salesforce resorted to 8,000 job cuts on January 4 ( 10% of its employees). Further, the company’s restructuring plan aims at cutting costs further and improving margins via a reduction in office space and selling of real estate. In a letter to its employees, Salesforce’s CEO Marc Benioff said, “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.” For reference, Salesforce's employee count stood at around 80,000 people at the end of October 2022. That is almost double its pre-pandemic employee count of 48,000 three years ago. The company expects to incur costs to the tune of $1.4 billion to $2.1 billion related to the cost-cutting measures. Out of that,  $800 million - $1 billion will be incurred in its Fiscal Q4 quarter, while $1.2 billion - $1.7 billion will be reported in the future. The company refrained from giving any long-term cost savings outlook arising from the restructuring plan. Looking at Salesforce's income statement, SG&A comprises a major chunk of operating costs. The job cuts, therefore, should certainly boost its margins, going forward. Meanwhile, Salesforce revenue growth has witnessed a disappointing slowdown, registering its lowest growth in years at 14% in Q3. The company expects that number to come down further in its upcoming Q4 results, expected to release on February 28. There are other issues facing the company, too, including the resignation of top executives. Co-CEO Bret Taylor stepped down from his position recently. Further, Slack’s CEO, Stewart Butterfield, also left the company (Slack was acquired by Salesforce in 2020). Longer term, the company aims to reach adjusted operating margins of 25% by FY2026 on the back of revenues of $50 billion. Given the current recessionary scenario, both targets look difficult to meet. Having said that, the restructuring initiatives, if successfully implemented, may move the company closer to its goals. Is CRM Stock a Strong Buy, According to Analysts? CRM stock commands a Strong Buy rating on Wall Street based on 27 Buys and eight Holds. Salesforce’s average price forecast of $193.45 implies 31.2% upside potential. Amazon ( NASDAQ:AMZN) Amazon had a very tough 2022. In fact, it broke a record, as it was the first listed company ever to lose over $1 trillion worth of valuation. Last week, Amazon announced its biggest job cuts ever, as it plans to let go of 18,000 workers. This represents around 6% of its total workforce. CEO Andy Jassy indicated that most of the layoffs will come from the company's e-commerce and human resources divisions. Positively, this could mean that Amazon’s growth engine, AWS, may not be impacted much by the job cuts. Looking back, COVID-19 winner Amazon multiplied its logistics networks worldwide and also significantly expanded its workforce to tap the enormous uproar in demand for online merchandise during the lockdowns. With things now back to normal, the abnormal demand subsided. On top of that, revenue growth and profitability took a further hit from rising interest rates, inflation, and subsequent consumer spending cuts in 2022. In such a scenario, the job cuts will help the company control its costs amid declining revenue expectations. Notably, while e-commerce revenues have dipped, Amazon’s key growth engine, AWS, remains resilient. AWS’s leadership position in the cloud infrastructure space is undeniable and presents a robust growth outlook for years to come. Is Amazon a Buy, According to Analysts? Despite the massive stock price losses in 2022, the Wall Street community continues to be optimistic about Amazon stock. Overall, the stock commands a Strong Buy consensus rating based on 36 Buys and three Holds. Amazon’s average price target of $137.50 implies 53% upside potential from current levels. The Takeaway Amazon and Salesforce have strong potential to grow in the long run, given their dominance. However, in the short term, both companies can remain range bound as they continue with cost-cutting initiatives to combat a slowdown. Disclosure

The European Commission wants to ask Big Tech and European Union telecoms providers about their investment outlays and cloud infrastructure plans before tabling legislation that could make the former pay for network costs, a person familiar with the matter said on Tuesday.

U.S. stocks ended higher on Tuesday on relief that Federal Reserve Chair Jerome Powell refrained in a speech from commenting on rate policy.

U.S. stocks edged higher in afternoon trading Tuesday, led by big growth shares, on relief that Federal Reserve Chair Jerome Powell refrained in a speech from commenting on rate policy.

After a growth spurt that accompanied pandemic-era lockdowns, e-commerce merchants faced slowing sales growth and tough comps, spurring some companies to look for additional ways to grow their businesses. As the world's leading online retailer, Amazon (NASDAQ: AMZN) was hit harde

UK lawmakers have called on Amazon to clarify comments made by a senior executive at a recent parliamentary hearing, after an advocacy group accused him of providing "misleading" evidence concerning the company's treatment of warehouse workers.

Wall Street's main indexes rose on Tuesday as Federal Reserve Chair Jerome Powell steered clear of commenting on the monetary policy outlook, with focus turning to an upcoming inflation reading scheduled for later this week.

What happened E-commerce giant Amazon.com (NASDAQ: AMZN) stock got a lift this morning after announcing that it will expand its Buy with Prime shopping program to make it "widely available to U.S.-based merchants by Jan. 31."

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Looking for broad exposure to the Technology - Internet segment of the equity market? You should consider the Invesco NASDAQ Internet ETF (PNQI), a passively managed exchange traded fund launched on 06/12/2008.