An investment banking advisory firm names one hyperscaler as its top AI play with satellites as its next frontier.
In a new CNBC interview, Evercore ISI’s Mark Mahaney says his winning stock play is Amazon (AMZN), noting that the company’s cloud growth has re-accelerated and demand remains strong as enterprises lean into AI workloads.
“Specifically, right now, you just got the unlock from AWS. You finally got this thing above 20% and that growth could get better than that next year. The demand across the industry is super strong. There’s an OpenAI deal that they did. The capacity is really coming online for Amazon… Look, I’ve got my what I call
these amplification catalysts.
Advertising revenue is still clicking well north of 20%. It’s wonderful for Amazon’s margins. The retail business is doing just fine at about 10, 11% growth. And those operating margins that are really gapped up for the retail business over the last couple of years. I think they continue to gap up. It’s a reflection of automation, robotization, greater efficiencies in their retail business.”
Mahaney also mentions Project Kuiper, Amazon’s low-Earth orbit satellite designed to deliver fast and reliable internet to customers.
“I’ll highlight one is Kuiper. We’re going commercial satellite Internet access for Amazon next year. I think it’s proven that this is a big opportunity. I think Amazon can participate too.”
While Mahaney is bullish on Amazon, he holds an opposing view for Meta (META), at least for the time being.
“So Meta is not one of my top picks, in part because you need kind of a super catalyst for all of that money that they’re putting into Superintelligence. I think you’ll get it, but… it’s really hard to predict, and I don’t think that comes until sometime next year.”
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