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what it is
Amazon sells stuff online, runs a giant cloud platform, and rents its website to third-party sellers.
how it gets paid
Last year Amazon made $716.9B in revenue. North America retail was the main engine at $437.3B, or 61% of sales.
why it's growing
Revenue grew 12.4% last year. Revenue rose to $213.4B, up 14% vs. prior year.
what just happened
Amazon posted $1.95 EPS, topping the $1.81 estimate by 7.73%.
At a glance
A++ balance sheet — fortress balance sheet — as safe as it gets
45/100 earnings predictability — expect surprises
33.4x trailing p/e — you're paying up for this one
16.0% return on capital — nothing to write home about
xvary composite: 84/100 — above average
What they do
Amazon sells stuff online, runs a giant cloud platform, and rents its website to third-party sellers.
You shop in one place, and Amazon keeps 61% of sales in North America. AWS (cloud services, rented computing power) is 17% of sales, so what: the store funds the machine and the machine funds the future. Leaving is painful because your saved address, subscriptions, and order history are already inside the machine.
How they make money
$716.9B
annual revenue · their business grew +12.4% last year
North America retail
$437.3B
International retail
$157.7B
AWS
$121.9B
The products that matter
online retail and merchant platform
Amazon Marketplace
$403.1B combined · 56% of revenue
online stores grew 7% to $247.0B, while third-party seller services grew 13% to $156.1B. One brings the traffic. The other monetizes the merchants using that traffic.
56% of revenue
enterprise cloud computing platform
AWS
$107.6B · +19% growth
AWS is 15% of revenue and grew 19% last year. In human-speak: this is the segment investors watch for profit leverage, not just scale.
15% of revenue
retail media and digital ads
Advertising Services
$56.2B · +24% growth
this $56.2B segment grew 24% last year. It monetizes purchase intent directly, which is a much cleaner business than shipping another package.
fastest grower
Key numbers
$716.9B
annual sales
That is the size of the machine. A company this big does not need perfect execution, but it does need the engines to keep turning.
33.4x
trailing P/E
P/E → price divided by profit → so what: you are paying 33.4 years of last year’s earnings for one share of Amazon.
16.0%
return on capital
Capital return → profit made on money invested → so what: Amazon is making $16 back for every $100 it puts to work.
$299
VL target
That target is about 25% above $239.12, which means the market still leaves room for upside if the numbers cooperate.
Financial health
A++
strength
- balance sheet grade A++ — the absolute highest — fortress balance sheet
- risk rank 2 — safer than 80% of stocks
- price stability 50 / 100
- long-term debt $50.7B (2% of capital)
- net profit margin 12.1% — keeps 12 cents of every dollar in revenue
- return on equity 18% — $0.18 profit for every $1 investors have put in
A++ — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in AMZN 3 years ago → it's now worth $24,370.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Amazon posted $1.95 EPS, topping the $1.81 estimate by 7.73%.
Revenue rose to $213.4B, up 14% vs. prior year. Gross margin was 48.47%, which is the kind of number that keeps the model people awake.
$213.4B
revenue
$1.95
eps
48.47%
gross margin
the number that mattered
The $1.95 EPS beat the $1.81 estimate by 7.73%, which says Amazon still earns more than the market expected.
-
amazon.com’s earnings growth will likely slow.
-
we estimate that earnings per share rose about 30% in 2025, and that 10% growth is in store for the new year.granted, expectations have consistenly been exceeded (consensus views for 2025 profits were around $6.00 per share at the beginning of the year). still, significant cost-savings measures implemented in the core e-commerce operations have already occurred over the past three years.
-
plus, amazon web services (aws) is facing stiffer competition, and profit growth (+13%) trailed revenue growth (+18) in the first nine months of 2025.
-
worries over amazon web services’ competitive position seem overblown for now.
-
top-line growth reaccelerated above 20% last quarter, after prior highteen rates disappointed wall street.we suspect more moderate gains are simply due to aws’ larger base, but ai industry dynamics bear watching (see below).
source: company earnings report, 2026
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What could go wrong
the #1 risk is AWS growth slowing while Amazon keeps spending into data centers and infrastructure.
med
the premium multiple needs cloud and ads to keep carrying the story
AWS grew 19% and advertising grew 24%. Those are the segments carrying the valuation logic. If cloud growth slips while Amazon keeps funding data centers, logistics, and fulfillment, the stock gets judged more like a retailer and less like a hybrid platform.
AWS plus advertising are 23% of revenue, but they do far more than 23% of the narrative work behind a 33.4x earnings multiple.
med
the biggest segment still has to ship everything
Online stores produced $247.0B of revenue and grew 7%. That is a huge business, but it is not the fast-growing one. If higher-margin segments cool at the same time the retail core stays slower, you are left owning an enormous operation with all the cost intensity that implies.
This puts pressure on the $403.1B marketplace ecosystem and the recent 10.8% quarterly margin investors are using as proof that the machine is getting more efficient.
med
one margin number on this page does not match the others
The current feed shows a 22.0% operating margin, while the same snapshot also shows a 10.8% recent quarterly margin and an 11.0% net margin. That does not mean the company is broken. It means you should not lean on a single headline figure without cross-checking the source.
Bad inputs make clean-looking theses look smarter than they are. On a 33.4x stock, that matters.
a slowdown in AWS or advertising would hit the exact parts of Amazon that make investors forgive the lower-margin parts.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
AWS quarterly revenue growth
AWS grew 19% last year. If that drops meaningfully while capex stays high, the premium multiple gets harder to defend.
trend
advertising staying ahead of AWS
Ads grew 24% to $56.2B. If that business keeps outgrowing AWS, the mix keeps improving without Amazon needing to sell one more toothbrush itself.
risk
margin consistency across the data set
Compare the 22.0% operating-margin figure in the feed with the recent 10.8% quarterly margin. If the gap persists, verify the source before trusting the headline number.
calendar
commerce mix shift each earnings cycle
Online stores grew 7%. Third-party seller services grew 13%. You want the fee-heavy side of commerce taking a larger share of the mix every quarter.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak: they like it.
risk profile
safer than average
stability score 2 — safer than roughly 80% of stocks. Not low-volatility, but not fragile either.
chart momentum
average
technical score 3 — the stock is moving with the broader market, with no major signal either way.
earnings predictability
45 / 100
earnings are harder to model here than the balance sheet is. You should expect surprises.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 2,894 buyers vs. 2,140 sellers in 3q2025. total institutional holdings: 6.8B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$196
$402
$239
current price
$299
target midpoint · +25% from current · 3-5yr high: $475 (+100% · 16% ann'l return)
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