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Digital Giants Market Analysis: Amazon | Alphabet Google Q4 2020 Earnings

All Eyes On Digital Giant Earnings

Digital giants Amazon and Google report earnings.  As pandemic winners, both venerable big tech titans have shown the resiliency of their business models and their ability to enter new monetization models.

Amazon Buy $4000

Investment relationship - NO
Individual owned - YES
Family owned - YES
Company owned - NO

All signals point to a blow out 4th quarter.  This could be Amazon's first $100B quarter, joining Apple in this achievement. Between prime day, holiday sales, and the ramping up of 400,000 more workers, Amazon is estimated to have a blockbuster quarter.  Expect higher costs for the holiday season beyond the $10B for workplace precautions.

Highlights most likley will include growth at AWS which has gone from $12B in revenues 5 years ago to a forecasted total of $40 to $45B.  Amazon Prime memberships are expected to grow as streaming services, free shipping, and subscription revenues grow.  One area to watch for future growth will be ad revenues.  Amazon has gone from almost nothing to a forecasted $10 to $13B in ad revenues for 2020. 

Amazon is the gold standard for digital giants and has done the best job at monetizing revenue streams.

Rumors are that Andy Jassy will be the new CEO and Jeff Bezos to be elevated to Executive Chairman in Q3 2021.

Google Buy $2200 

Investment relationship - NO
Individual owned - YES
Family owned - YES
Company owned - NO

With Facebook showing that the digital ad business is back, Google is expected to show similar trends with an expected 18 to 21% growth.  Further, investors can expect continued growth at YouTube with 45 to 50% growth. 

Cloud and autonomous vehicles are the future growth areas for Google.  The Google Cloud unit is doubling down on industries and is expected to show 35 - 40% or growth for the quarter.   The Ford - Google partnership shows the extent Google will go to partner up in key industries.  These industry partnerships will emerge as the norm over the next 24 to 36 months.   Google will be a digital giant and a post pandemic winner.

Your POV

Ready for a crazy 2021 for Big Tech as the reflation trade takes off? What are your hot picks for 2021?

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