Specialty Retail

Specialty Retail's average sentiment score eased from 6.83 to 6.67 this quarter, but the modest headline decline hides a widening split between the group's two largest names. Amazon (AMZN) jumped from 7 to 9, its strongest quarter in the set, on Q1 revenue of $181.5 billion, up 17% year-over-year, with AWS accelerating to 28% growth ($37.6 billion, a $150 billion annualized run rate and $364 billion backlog) and operating income of $23.9 billion at a record 13.1% margin. Advertising added $17.2 billion, up 22%. PDD Holdings (PDD) moved the other way, slipping from 7 to 6: total revenue rose 11% to RMB 106.2 billion and transaction services grew 20% to RMB 56.3 billion, but online marketing services revenue was roughly flat at RMB 49.9 billion and GAAP diluted earnings per ADS fell to RMB 8.48 from RMB 9.94. Management deprioritized near-term results, injecting an initial RMB 15 billion into a new first-party brand company with RMB 100 billion of investment planned over the next few years.