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1. Company Snapshot

1.a. Company Description

Amazon.com, Inc.engages in the retail sale of consumer products and subscriptions through online and physical stores in North America and internationally.The company operates through three segments: North America, International, and Amazon Web Services (AWS).


Its products offered through its stores include merchandise and content purchased for resale; and products offered by third-party sellers The company also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Rings, Blink, eero, and Echo; and develops and produces media content.In addition, it offers programs that enable sellers to sell their products in its stores; and programs that allow authors, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content.Further, the company provides compute, storage, database, analytics, machine learning, and other services, as well as fulfillment, advertising, and digital content subscriptions.


Additionally, it offers Amazon Prime, a membership program.The company serves consumers, sellers, developers, enterprises, content creators, and advertisers.Amazon.com, Inc.


was incorporated in 1994 and is headquartered in Seattle, Washington.

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1.b. Last Insights on AMZN

Amazon's recent performance was driven by robust Q3 results, with strong AWS growth, reaccelerating to 20% revenue growth, and solid top-line growth. The company's AI-fueled growth in AWS, advertising, and retail drove a significant earnings beat. Amazon's secular growth trends in cloud, AI, and e-commerce remain intact. However, margin compression and free cash flow concerns persist. A recent deal with OpenAI strengthens AWS strategic positioning. Guidance for Q4 remains robust, alleviating concerns from the prior quarter. (Source: Wedbush, TQI)

1.c. Company Highlights

2. Amazon's Q3 2025 Earnings: A Strong Performance Across Segments

Amazon.com reported $180.2 billion in revenue for Q3 2025, a 12% increase year-over-year, excluding the impact of foreign exchange rates. Operating income was $17.4 billion, but would have been $21.7 billion without two special charges: a $2.5 billion FTC settlement and $1.8 billion in estimated severance costs. Earnings per share (EPS) came in at $1.95, beating analyst estimates of $1.57. The company's trailing 12-month free cash flow was $14.8 billion.

Publication Date: Oct -31

📋 Highlights
  • Revenue Growth & Special Charges: Amazon reported $180.2B revenue (12% YoY), with operating income at $17.4B vs. $21.7B after excluding $4.3B in charges ($2.5B FTC, $1.8B severance).
  • AWS Strongest Growth in 11 Quarters: AWS revenue rose 20.2% YoY to $33B, with a $200B backlog and 3.8 gigawatts of new power capacity added in the past year.
  • Advertising Revenue Surge: Amazon Ads hit $17.6B (22% YoY growth), driven by partnerships (DSP with Roku, Netflix) and 1.3M sellers using AI for listings.
  • CapEx & AI Investments: Q3 cash CapEx was $34.2B, with full-year 2025 expected at $125B; Trainium2 grew 150% QoQ, and Trainium3 will be 40% better.
  • Third-Party Seller Expansion: 62% seller unit mix (up 200 bps YoY), with 14% more product selection and 80M+ uses of the "add to delivery" button.

Segment Performance

AWS saw strong growth, with revenue increasing 20.2% year-over-year, the largest growth rate in 11 quarters. AWS backlog grew to $200 billion by Q3 quarter end, with several unannounced new deals in October. Amazon ads generated $17.6 billion in revenue, growing 22% year-over-year, with strength across the broad portfolio of advertising offerings. The North America segment operating income was $4.8 billion, with an operating margin of 4.5%. Excluding a $2.5 billion charge, operating income would have been $7.3 billion with an operating margin of 6.9%.

Operational Highlights

The company is investing heavily in capacity, adding over 3.8 gigawatts of power in the past 12 months, and expects to add at least another 1 gigawatt of power in the last quarter of the year. In stores, the team delivered and innovated for customers, with 14% more selection since last quarter and hundreds of thousands of items added from popular brands. Amazon is also innovating with AI, with tools like SageMaker, Bedrock, and AgentCore, which allow customers to build and deploy their own foundation models and agents.

Valuation and Outlook

Amazon's P/E Ratio is 31.1, and its P/S Ratio is 3.44. With analysts estimating next year's revenue growth at 10.5%, the current valuation seems reasonable. The company's ROIC is 11.77%, and its ROE is 23.62%, indicating a strong return on investment. With a strong performance across segments, Amazon is well-positioned for continued growth, driven by its investments in AI, advertising, and cloud computing.

Growth Prospects

Amazon is excited about its long-term prospects in agentic commerce, which can provide a better experience for customers who don't know what they want to buy. The company is also seeing significant growth in AI areas, including inference, training, and the use of custom silicon. With a strong growth trajectory, Amazon is expected to continue investing significantly in robotics, which improve safety, boost productivity, and increase speed, allowing human teammates to focus on problem-solving.

3. NewsRoom

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NVDA "Rising Tide," AVGO Accelerating Demand, GOOGL & AMZN Power Competition

01:00

Source: youtube.com

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AWS CEO Matt Garman thought Amazon needed a million developers — until AI changed his mind

Dec -04

Source: geekwire.com

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Amazon: Do Not Underestimate The Catch-Up Trade (Rating Upgrade)

Dec -04

Source: seekingalpha.com

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Amazon Cutting USPS Ties? Analyzing AMZN Price Action & Options Activity

Dec -04

Source: youtube.com

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Dow Jones Today: Major Stock Indexes Little Changed; Weekly Jobless Claims Unexpectedly Fall; Inflation Data on Tap Tomorrow

Dec -04

Source: investopedia.com

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Amazon Reviews Options as USPS Weighs Competitive Auction for Contract

Dec -04

Source: gurufocus.com

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AWS Introduces Graviton5—the Company's Most Powerful and Efficient CPU

Dec -04

Source: businesswire.com

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Amazon reportedly weighs ending USPS partnership

Dec -04

Source: proactiveinvestors.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (17.89%)

6. Segments

North America

Expected Growth: 11.4%

Amazon’s North America operations will continue to grow driven by increasing adoption of online shopping, expanding e-commerce capabilities, and the company’s strong dominance in the region.

International

Expected Growth: 23.5%

Amazon’s International segment is expected to grow driven by increasing cross-border e-commerce, expansion in emerging markets, and growth in online shopping penetration, particularly in regions like Europe, Latin America, and Asia.

Amazon Web Services (AWS)

Expected Growth: 33.8%

Amazon Web Services (AWS) drives growth through its leadership in cloud infrastructure, expanding portfolio of cloud-based services, and strong traction with enterprises, startups, and government agencies, leveraging its brand reputation, scalability, and cost-effectiveness.

7. Detailed Products

Online Retail

Amazon.com is an e-commerce platform that allows customers to browse and purchase a wide variety of products, including books, electronics, clothing, and more.

Amazon Web Services (AWS)

AWS is a cloud computing platform that provides a range of services, including computing power, storage, databases, analytics, machine learning, and more.

Alexa and Echo Devices

Alexa is a virtual assistant AI technology that powers Echo smart speakers and other devices, allowing users to control their smart home, play music, and access information with voice commands.

Prime Video

Prime Video is a streaming service that offers a vast library of movies, TV shows, and original content, including exclusive Amazon Original series and movies.

Amazon Fresh

Amazon Fresh is a grocery delivery service that allows customers to order fresh produce, meat, dairy products, and other essentials, with same-day or next-day delivery.

Audible

Audible is an audiobook platform that offers a vast library of audiobooks, podcasts, and original content, with features like Whispersync for seamless switching between devices.

Amazon Advertising

Amazon Advertising is a platform that allows businesses to advertise their products and services on Amazon.com, including sponsored products, sponsored brands, and sponsored displays.

8. Amazon.com, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Amazon's business model is highly diversified, making it difficult for substitutes to emerge. The company's strong brand recognition and customer loyalty also reduce the threat of substitutes.

Bargaining Power Of Customers

Amazon's customers have some bargaining power due to the availability of alternative e-commerce platforms. However, the company's strong brand recognition and customer loyalty mitigate this power to some extent.

Bargaining Power Of Suppliers

Amazon's suppliers have limited bargaining power due to the company's massive scale and negotiating power. The company's ability to source products directly from manufacturers also reduces supplier power.

Threat Of New Entrants

The threat of new entrants is low due to the significant barriers to entry in the e-commerce industry. Amazon's strong brand recognition, large customer base, and established logistics network make it difficult for new entrants to compete.

Intensity Of Rivalry

The e-commerce industry is highly competitive, with many established players competing for market share. Amazon faces intense rivalry from companies like eBay, Walmart, and Google, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.36%
Debt Cost 3.95%
Equity Weight 56.64%
Equity Cost 9.72%
WACC 7.22%
Leverage 76.56%

11. Quality Control: Amazon.com, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Build-A-Bear Workshop

A-Score: 6.1/10

Value: 5.1

Growth: 6.9

Quality: 7.0

Yield: 5.0

Momentum: 10.0

Volatility: 2.7

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AutoZone

A-Score: 5.9/10

Value: 3.7

Growth: 7.2

Quality: 6.1

Yield: 0.0

Momentum: 9.0

Volatility: 9.7

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O'Reilly Automotive

A-Score: 5.8/10

Value: 2.9

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 8.5

Volatility: 10.0

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eBay

A-Score: 5.5/10

Value: 3.3

Growth: 6.1

Quality: 6.9

Yield: 3.0

Momentum: 8.0

Volatility: 5.7

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Amazon

A-Score: 5.3/10

Value: 1.8

Growth: 8.8

Quality: 6.9

Yield: 0.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Tractor Supply

A-Score: 5.0/10

Value: 2.4

Growth: 7.3

Quality: 5.4

Yield: 3.0

Momentum: 3.5

Volatility: 8.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

229.11$

Current Price

229.11$

Potential

-0.00%

Expected Cash-Flows