Focus on Prime Boosts Amazon's 3rd Quarter
The firm saw accelerating revenue trends across most categories.
Amazon's third-quarter update made a convincing case that the network effect underpinning their wide economic moat is strengthening. Most categories saw accelerating revenue trends indicating greater engagement among Prime members, third-party sellers, and Amazon Web Services users.
We believe investors should focus on three themes: 1) the shift in the U.S. from Prime acquisition to engagement via new products and services; 2) the jump in Prime international and the lifetime value potential it brings; and 3) continued monetization of AWS.