SuperworthAmazon.com, Inc. AMZN
- Market cap
- $2.8T
- PE
- 20.9×
- 10y median 79.5×
- Forward PE
- Price to sales
- 3.6×
- EV/EBIT
- 29.1×
- Revenue, 12 months
- $775.7B
- +16% on a year ago
- Net margin
- 17.4%
- Free cash flow yield
- —
Amazon finally earns like it means it
Margins arrived. Now the cash is going to data centers.
Sales growth is speeding up
Growth in trailing twelve-month sales sped up from 10.1 to 15.8 percent over the last five quarters. Last quarter sales rose 20 percent, and AWS, the cloud arm, grew at its fastest pace in 18 quarters.
Earnings are a different chart
Earnings per share as reported under accounting rules (GAAP) went from 1.93 to 12.43 dollars in under three years. Almost half of that 12.43 came in one quarter, mostly from a gain on Amazon's stake in Anthropic, the AI lab. Leave out one-off items and the trailing adjusted figure is 8.50 dollars.
Because margins turned
Operating margin, the share of sales the business itself keeps, reached 12.1 percent over the last year, a ten-year high and more than twice its ten-year median. AWS and advertising earn more per dollar than retail, and AWS grew 37 percent last quarter. Net margin is higher still at 17.4 percent, but that gap comes from gains outside the business, mostly on the Anthropic stake.
The stock rose even as the multiple shrank
PE is the price divided by a year of earnings per share. The price doubled in three years, but reported earnings grew faster, so PE fell to about 21, lower than on 99 percent of days in ten years. On adjusted earnings of 8.50 it is about 30, level with the peer median.
The cash left the building
Free cash flow went from 43 billion dollars in 2024 to minus 11.6 billion over the last year, as Amazon spends more than it earns in cash on data centers. More is coming: deals tied to up to 60 billion dollars of Qualcomm AI chips and up to 8 billion of Generac backup generators. With cash flow below zero, the price rests on this spending paying off later.
The fear: a lawsuit over ad pricing
On August 31 the FTC and 22 states sued Amazon, alleging hidden surcharges in its ad auctions took tens of billions of dollars from over one million advertisers. Advertising is one of the high-margin businesses behind the margin gains. The stock peaked on August 3, before the suit, and is about 10 percent below that high.
October 29 tests the story
Amazon reports the third quarter on October 29. Analysts expect 1.96 dollars a share before one-off gains, against 5.75 last quarter with the Anthropic gain. At today's price, consensus puts it at about 27 times the next twelve months of earnings, a little above the peer median of 26. Strong AWS growth and steady margins would support that price. Slowing cloud growth on rising spending would not.
What has happened lately
- SEC, Generac grants Amazon a warrant tied to up to $8 billion of data-center backup generator purchasesSizes a long-term power-equipment commitment for Amazon data centers, with $2.4 billion of deliveries expected in 2027-2028, adding to future capex.
- SEC, Qualcomm and AWS sign custom AI silicon deal, with warrant tied to up to $60B of purchasesSizes AWS's planned inference-chip commitment and adds a third-party custom-silicon supplier alongside Amazon's own Trainium line.
- FTC, FTC and 22 states sue Amazon over undisclosed surcharges in its search-ad auctionsThe complaint alleges hidden charges over seven years took tens of billions of dollars from over one million advertisers, putting ad revenue and pricing at legal risk.
- Amazon, Amazon Q2 2026: sales up 20% to $200.6B, AWS up 37%, Q3 operating income guided to $22.5-26.5BAWS grew at its fastest pace in 18 quarters, while trailing free cash flow turned negative $7.6 billion on a $66.1 billion rise in AI-driven capex.
Headlines link to the original source.
Charts
Financials
| Income statement | Q4 FY23 | Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 | Q1 FY26 | Q2 FY26 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| $170B | $143.3B | $148B | $158.9B | $187.8B+11% | $155.7B+9% | $167.7B+13% | $180.2B+13% | $213.4B+14% | $181.5B+17% | $200.6B+20% | |
| Cost of revenue | $92.6B | $72.6B | $73.8B | $81B | $98.9B+7% | $77B+6% | $80.8B+10% | $88.7B+10% | $110B+11% | $87.5B+14% | $95.8B+19% |
| Gross profit | $77.4B | $70.7B | $74.2B | $77.9B | $88.9B+15% | $78.7B+11% | $86.9B+17% | $91.5B+18% | $103.4B+16% | $94.1B+20% | $104.8B+21% |
| R&D | $22B | $20.4B | $22.3B | $22.2B | $23.6B+7% | $23B+13% | $27.2B+22% | $29B+30% | $29.4B+25% | $29.6B+29% | $33.2B+22% |
| SG&A | $15.9B | $12.4B | $13.6B | $13.3B | $16B+1% | $12.4B−0% | $14.4B+6% | $14.6B+9% | $17B+6% | $12.9B+4% | $14.5B+1% |
| $13.2B | $15.3B | $14.7B | $17.4B | $21.2B+61% | $18.4B+20% | $19.2B+31% | $17.4B+0% | $25B+18% | $23.9B+30% | $27.5B+43% | |
| Interest expense | $713M | $644M | $589M | $603M | $570M−20% | $541M−16% | $516M−12% | $538M−11% | $679M+19% | $800M+48% | $1.3B+155% |
| Pre-tax income | $13.7B | $13B | $15.2B | $18B | $22.3B+63% | $21.7B+67% | $20.9B+37% | $28.2B+56% | $26.6B+19% | $39.8B+84% | $80.9B+288% |
| $3.1B | $2.5B | $1.8B | $2.7B | $2.3B−24% | $4.6B+85% | $2.7B+52% | $6.9B+155% | $4.9B+113% | $9.6B+110% | $18.2B+580% | |
| Net income | $10.6B | $10.4B | $13.5B | $15.3B | $20B+88% | $17.1B+64% | $18.2B+35% | $21.2B+38% | $21.2B+6% | $30.3B+77% | $62.6B+245% |
| $1.00 | $0.98 | $1.26 | $1.43 | $1.86+86% | $1.59+62% | $1.68+33% | $1.95+36% | $1.95+5% | $2.78+75% | $5.75+242% | |
| 10.6B | 10.7B | 10.7B | 10.7B | 10.8B+2% | 10.8B+1% | 10.8B+1% | 10.8B+1% | 10.9B+1% | 10.9B+1% | 10.9B+1% |
From each company's 10-Q and 10-K filings. Fiscal years are four fiscal quarters added up; balance sheet lines are as of the period's end. Growth is on the same period a year earlier.
Estimates
Next earnings report: .
Analyst consensus for the next eight quarters, with the range from the lowest to the highest estimate, is part of Superworth Pro.
Peers
Companies of any business within ten times Amazon.com's size, closest in size first.
| Company | Market cap | PE | Its 10y median PE | Fwd PE | P/S | Revenue growth | Net margin |
|---|---|---|---|---|---|---|---|
| AMZNAmazon.com, Inc. | $2.8T | 20.9× | 79.5× | 3.6× | +16% | 17.4% | |
| MSFTMicrosoft Corporation | $3.9T | 29.5× | 33.1× | 11.9× | +18% | 40.3% | |
| GOOGAlphabet Inc. | $4.2T | 17.4× | 28.1× | 9.5× | +20% | 54.8% | |
| METAMeta Platforms, Inc. | $1.8T | 27.2× | 28.5× | 8.1× | +28% | 29.8% | |
| AVGOBroadcom Inc. | $1.8T | 48.1× | 44.4× | 20.2× | +49% | 42.9% | |
| AAPLApple Inc. | $4.9T | 38.6× | 27.8× | 10.5× | +14% | 27.6% | |
| TSLATesla, Inc. | $1.5T | 350× | 177× | 14.4× | +12% | 3.7% | |
| NVDANVIDIA Corporation | $5.7T | 30.0× | 53.9× | 18.9× | +83% | 63.7% | |
| MUMicron Technology, Inc. | $1.2T | 14.7× | 17.4× | 9.2× | +256% | 63.8% | |
| LLYEli Lilly and Company | $1.1T | 39.9× | 41.3× | 14.0× | +50% | 33.5% | |
| BRK-BBerkshire Hathaway Inc. | $1.1T | 12.7× | 14.5× | 2.8× | +4% | 22.3% | |
| Peer median | $1.8T | 29.8× | 30.8× | 11.2× | +24% | 36.9% |
About
- Chief executive
- Andy Jassy, since 2021Joined 1997, CEO since 2021. Founder Jeff Bezos is executive chair. Source
- Founder chair
- Jeff Bezos
- Industry
- Specialty Retail
- Sector
- Consumer Cyclical
Valuation data, not investment advice. Prices as of .