How Tax Reforms Could Affect Amazon

How Tax Reforms Could Affect Amazon


Nov. 2 2017, Updated 10:30 a.m. ET

Amazon’s cash reserves and exposure

So far in the series, we’ve discussed potential effects of Trump’s tax reforms on Apple (AAPL) and Microsoft (MSFT). We also compared their stock and performance against the tech-heavy S&P 500’s (VOO). Amazon (AMZN), Apple, Microsoft, Alphabet (GOOGL), and Facebook (FB) collectively account for 40% of the S&P 500.

The above chart by Bank of America shows the 17 US companies with the highest cash reserves. Close to 33% of Amazon’s cash reserves are parked abroad.

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Amazon’s dominance in the cloud space

With close to 40% of the market share, Amazon continues to lead the crowded and competitive cloud space. The increased adoption of the cloud and other technology has fostered investors’ interest in the overall technology space. Tech stocks’ revenue and earnings are expected to rise 6.7% and 9.7% in the quarter, respectively.

Amazon announced its fiscal 3Q17 earnings on October 25, 2017. It posted revenue and non-GAAP (generally accepted accounting principles) earnings per share of ~$43.7 billion and -$0.52, respectively, exceeding analysts’ expectations by $1.6 billion and $0.49.


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