Jeff Bezos' Amazon Could See a Sizable Mark-to-Market Gain From Its Anthropic Stake When It Reports Earnings July 30, BofA Says
Amazon's $13 billion investment has become a windfall.
Overview
It's Amazon's (NASDAQ: AMZN) turn to step up to the earnings podium. The online retailer founded by Jeff Bezos is expected to show strong growth in its cloud computing business, Amazon Web Services, and is likely to increase its planned $200 billion capital expenditure budget as memory and storage products become more expensive.
I'm fully expecting Amazon to post solid second-quarter earnings on Thursday, July 30. But considering that investors seem to have the yips right now about spiraling data center costs, I expect the stock to drop due to capital expenditure growth and shrinking free cash flow. Yet there's one item that certainly will cause investors to smile: the company's massive gains from its stake in the start-up AI company Anthropic.
Details
Amazon was an early investor in Anthropic, the company behind Claude, and put $13 billion in with the option to invest $20 billion more. That $13 billion stake is now worth much more, given that Anthropic is considering going public at a valuation of around $1 trillion. In a research note, Bank of America analysts point to Amazon's stake in Anthropic as a significant driver in its upcoming earnings report, generating a strong mark-to-market gain.
Source
Originally published at www.fool.com.