Amazon is currently the most bought stock by retail, so I spent some time digging through the recent financials to see what's actually going on beneath the surface.
The Profitability Story Is Actually Strong
Net income jumped from $59.2 billion to $77.7 billion, which is a 31% increase year over year. Operating margins hit around 12% and net margins near 10% by late 2025. These aren't numbers you'd typically associate with a company whose stock dropped 13% over the past few months. The business itself is generating more profit than ever.
The Cash Flow Situation Is More Complicated
Here's where it gets interesting. Operating cash flow grew to $139.5 billion, but capital expenditures ballooned to $131.8 billion. That's a massive spending increase that's eating into free cash generation. Long term debt also ticked up to $65.6 billion from $52.6 billion. The company is clearly betting big on something (likely AI infrastructure), but investors seem skeptical about the payoff timeline.
The Market Is Pricing In Execution Risk, Not Business Decline
The stock went from around $235 to $204 despite strong earnings growth. This disconnect suggests the market isn't worried about Amazon's core business. It's worried about whether all this capital spending will actually translate into returns. AWS still holds roughly 30% of global cloud infrastructure, but Azure and Google Cloud have been gaining ground.
The financial data and analysis were from [Finbase](https://thefinbase.com) and I also used [TradingView](https://www.tradingview.com/chart/3mprlymO/?symbol=NASDAQ%3AMZN) for its ability to view charts to get a broader understanding of Amazon’s price movements.
Are you buying Amazon ?
Amazon Analysis: The most popular stock
byu/MinuteDistribution31 ininvesting
Posted by MinuteDistribution31
3 Comments
Bought 20 shares today :))
I was shocked when I saw that Amazon had become number 1. I do think AWS will continue to lead in cloud providers, but their own models and AI agent on Amazon. com is quite weak. Rufus is definitely not my go to agent for shopping, but they do have a piece in Anthropic that will help them If there’s economic downturn, I do believe Amazon wont succeed as much as others like Walmart.
I know general sentiment is that it is due to SaaS/Software issue being impacted by AI, but I think market is taking precautions with the cloud companies who run infrastructure, who are heavily dependent on tech components and the recent price hikes will have an impact on such companies in a long term. Appreciation is delayed parameter and the costs to maintain and grow their infrastructures has not really been impacted by rising costs of tech components yet.