AMZN — long thesis
Thesis
AMZN delivered strong Q1: EPS $2.78 vs $1.64 expected, revenue $181.5B (+17%). AWS grew 28% (fastest in 15 quarters), chips business topped $20B run rate. Advertising grew 24% to $17.2B. However, FCF collapsed to $1.2B from $25.9B as capex hit $44.2B. Stock opened at record but reversed — capex FCF pressure is the market concern. Q2 guidance $194-199B. The AWS reacceleration validates the AI infrastructure thesis but the FCF squeeze is real.
Triggers
Entry: AMZN must hold above $225 for 2+ trading days. Current price $231.75 is above the entry zone. Buy on next pullback to $225-230 range, or if it holds $230+ for another session confirming breakout.
Exit: Hold for $280-300 target as AWS reacceleration narrative builds. Exit if AWS growth decelerates below 25% next quarter or FCF remains negative for 2 consecutive quarters. The capex-driven FCF squeeze limits near-term upside. Consider trimming if stock hits $275+ within 2 weeks (earnings gap fade pattern).
Invalidation: AMZN drops below $210 (original invalidation still holds). Broader market sells off sharply on Hormuz escalation. Q1 AWS growth decelerates below 25%. The ceasefire catalyst is gone — the thesis now rests entirely on AI/AWS structural strength and Q1 earnings April 29.