I think with Amazon, US growth and the outlook. What was your read on that? Well, I think, Ed, you know, the revenue trends across the board were in line with very healthy levels of Q1. So I was growing at 19% in line with expectations. I think they're getting incremental growth from related services that they're offering probably we estimate around 600 basis points. And, you know, there was commentary that there was very strong demand for their custom silicon, which I think was an interesting takeaway from the call. Set that in the context because you are such a great guest to have because your portfolios don't just own Amazon, but also the competitors in the hyperscale space. What does Amazon's market share look like right now? What does it mean in terms of having its own supply sustainability? Is it less dependent on an NVIDIA, for example? Yes, it's a really interesting topical question right now because it has implications for Nvidia.

So Amazon's analyzing revenue for IWC around 110 billion right now, and we'd say Azure for Microsoft, the number to play is at about 65, 67 billion. So still a good way ahead. But Azure is growing faster at about 33% versus MWC at 19. The way I think about it, though, is that they're both structurally growing at a very attractive rate, and it's really two players moving ahead and Google a distant third. So I think the market share is fine. They're doing all the right things. And in regards to the question about custom silicon, what they did say on the call was that the demand for the custom silicon, Infrared, Asia, and Cranium was very strong and that they would be asking their suppliers to increase manufacturing capacity. So that's important because customers do want to have lower-cost options. Not everyone wants large language models that use NVIDIA chips, and IWC is in a very good position to cater to that.

demand and potentially lower cost for consumers for their customers. It's not new in the context of Amazon. We focus on the cloud business, but there's much more. I mean, what did you make of the e-commerce business, particularly in areas where Andy Jassy has made cuts and scaled back spending a little bit? Well, e-commerce was extremely impressive on the margin side, if you recall back in two Q, they put out a guidance that was below expectations on margins. And the reason for that is, you know, consumers are demanding more daily essentials and you're seeing lower basket sizes, which means, you know, higher cost to serve. So. That entails that that means low margins for the core e-commerce business. But what they've been able to do to offset that pressure is consolidate more packages into the one delivery and also leverage the strategy with the regional distribution centers, which has been something in play for the last couple of

years, which means that they're closer to their consumer, which lowers their cost to serve, but also that they can increase the number of one-day and next-day delivery items. So it's both good on a customer satisfaction level as well as improving operating efficiencies. So margins based on the core e-commerce side. And I think we now have good visibility, the margins to continue to expand at a good healthy level for the next year or so despite investing in that business. I mean, let's take it back to the real investment outlay, a CapEx of $75 billion being articulated for 2024. And where that then pushes forward to remains how much they have to continue to double down on investment for infrastructure for I. Well, the 75 billion is a big step up from the 50-odd billion that they report in CapEx last year. So there's already a large step up

relating to IWC, Amazon Data Center, and server-related investment. So will they need to step up incrementally from here? I think it's going to be a lot more moderate going into 2025 versus 2024. But clearly, there is a lot of demand for air-related services and General Cloud. You got to remember that General Cloud is recovering as well. And the commentary keeps indicating that there's more demand than the supply that they can offer. So I think they'll continue to invest in CapEx in this area. But the important thing for investors is that IWC was still able to produce a 38% operating margin despite the investment we've seen to date. Now, that margin will probably come down, but I think what we can take away is that the margins are probably going to be higher than what people were expecting before this result.

Amazon Rises the Most Since February After Earnings

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