Amazon holds onto gains as MKM cuts estimates on worrying cloud, e-comm trends
Noah Berger

Amazon (NASDAQ:AMZN) shares rose more than 1% in early Wednesday trading - though off their best levels of the session - as investment firm MKM Partners lowered its estimates, citing worries over its cloud computing unit and e-commerce trends.
Analyst Rohit Kulkarni, who has a buy rating on Amazon (AMZN), now expects Amazon Web Services to grow 18% and 21% year-over-year in 2023 and 2024, down from prior views. He expects "modest margin improvement" in the unit, however.
"For 2023/2024, our [revenue] estimates are 1%/5% below the Street and we are modeling op. margins at 3.6%/5.1% vs. the Street's 3.9%/6.1% and 2021 margins of 5.3%," Kulkarni wrote in a note to clients. "We are encouraged by recent cost and headcount reduction initiatives that help align cost structures with current demand levels and may lead to above-trend margin expansion if the macro backdrop improves."
In addition, Kulkarni also said that retail margins in North America will be "break-even" in 2023, but international retail margins will continue to be low-single digit negative in 2023, with the potential for further decline. 
Kulkarni also lowered his per-share price target to $125 from $145 in conjunction with the estimate cut.
Earlier this month, Morgan Stanley analyst Morgan Nowak gave an overall bullish assessment of Alphabet (GOOG) (GOOGL) and Amazon (AMZN) but warned both companies could face lower profits due to higher costs.