“We continue to seek out how the legal path might progress for these types of actions, but in the
short term, we think it’s appropriate to move NFLX to Top Pick and Amazon to number two in our Large Cap pecking order… We last addressed regulatory risk in the September edition of Convergence Catch-up and our most notable change in view since then is that we have less confidence in the subject being a wall of worry to climb and instead increasingly clouding the fundamental thesis for Amazon, which we continue to view as a long-term structural Outperform due to the positive revenue mix shift of adding higher-margin businesses like AWS and advertising to lower-margin retail… Netflix, on the other hand, faces little to no regulatory risk, in our view; thus, we are more comfortable with it in the Top Pick slot at the moment, and Amazon moves down slightly to number two…”
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