Cramer's Morning Take: Amazon 10/27/23

Jim Cramer (0:01)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting.

We had some inflationary numbers that I thought were ran hot, but sometimes you have some numbers that can transcend that. So the Dow gets hurt by the inflationary numbers, I think, but look at that, Jeff. NASDAQ, funny thing, one of our largest positions is Amazon.

Jeff Marks (0:23)

Yep, seeing a lot of strength today in Amazon, of course, after earnings, some bounce back in Meta, which we definitely like, especially after upgrading our rating yesterday. Microsoft, too, having a good day, but the Amazon quarter was to stand out.

Jim Cramer (0:38)

The ones that could take it higher, I mean, behind the scenes, I make a lot of calls, and it's kind of what we do.

One of the things that was really interesting was that they were very upset at Amazon when the stock was at 119 if they reported, because they said, listen, we did 11.9 billion in profit.

We took share in Amazon Web Services. It looks like we've got a new way to be able to regionalize all the retail sales. We're monetizing Alexa. We're monetizing our video and our advertising is on fire. What do you want us to do? So what we said to do is, why don't you say you're going to make billions of dollars in AI? So what did they do? They said tens of billions.

Jeff Marks (1:17)

But the profitability story was great. You had operating margin 7.8%, the highest in 10 quarters. North America operating margin improved quarter over quarter for the sixth straight quarter, highest since the third quarter of 2018 So you're getting back to these pre-pandemic levels. Which they said they would, and a lot of it is due to that regionalization of the fulfillment network.

Originally, they just kind of had one single...

Jim Cramer (1:41)

Oh, if you wanted baby powder, you get it from Dallas.

Jeff Marks (1:44)

And now they have eight distinct networks. So that's increasing speeds, reducing costs, and then AWS stabilization, yes, around 12%, but also margins there, 30% for the first time in six quarters.

Jim Cramer (1:56)

Yeah, we had been waiting. We just thought margins just would keep going down.

I have been very critical of Amazon. They pay a lot of attention to me, and I pay a lot of attention to them. I've known these guys for years from thestreet.com. And they were like, Jim, what do you want us to just fire like 100,000 people? How about we figure out what they do? We had to ramp up. We're not gonna just get rid of these people. Let's figure it out.

I said, I think things are happening too fast. You gotta get rid of them. They're right, I apologize.

They had what I regarded as being some very good reasons about not to let people go because of the regionalization.

Jeff Marks (2:28)

Right, so look, the people in the warehouses, they obviously had to keep because the demand has still been so strong. They did do some layoffs of salaried workers though, corporate workers. And you can make an argument that one of those-

Exactly, one of those employees is worth many in the warehouse.

Jim Cramer (2:46)

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