Amazon (AMZN)

AMZN is Amazon.com Inc. Revenue mix in 2026: roughly 60% North America retail, 20% International retail, 16% AWS, and 4% Advertising plus Subscription. AWS is the operating-profit engine, contributing well over half of consolidated operating income despite being only ~16% of revenue. Retail margins are structurally low single-digit; AWS margins run 30%+; advertising is rapidly approaching $60 billion of annualized revenue at very high incremental margin.

Why it matters: AMZN is the cleanest read on US consumer spending (retail is roughly 1.5% of US PCE), on AI capex (AWS Trainium and Bedrock plus Anthropic partnership), and on advertising digital share-shift. The combination of three large, growing businesses with very different margin profiles makes AMZN multiple-construction unusually complex. Sum-of-the-parts valuations typically attribute 60-70% of equity value to AWS at a 25-30x EBITDA multiple and the rest to retail plus advertising at a low multiple.

AMZN trades near all-time highs in April 2026 with AWS growth running in the high-teens to low-20s, retail margins recovering toward pre-2022 levels, and advertising compounding 20%+. Capex for 2026 is approximately $100 billion, primarily AWS infrastructure including the Trainium custom-silicon investment. The Anthropic partnership ($8 billion of investment as of late 2024) provides AWS with a Claude-powered AI offering competitive with Azure-OpenAI and Google Cloud-Gemini.

The retail segment is exposed to Trump tariffs and consumer-spending sensitivity. Third-party seller (3P) revenue is roughly 60% of unit volume; Chinese seller exposure is meaningful. The bull case is that AWS multiple-expansion offsets retail margin pressure; the bear case is that AWS deceleration coincides with retail margin compression. Watch the AWS YoY growth print, sub-15% would compress the consolidated multiple.

AMZN has compounded approximately 28% annualized since the 1997 IPO. Major drawdowns: -94% in dot-com (1999-2001, the deepest large-cap survivor), -65% in 2008-2009, -55% in 2022 (rate shock plus margin compression). The three drivers are AWS growth and operating margin, retail unit volume and operating margin, and advertising revenue mix. Capital efficiency (capex relative to AWS revenue) is the longer-term swing factor.

First, AWS YoY growth and operating margin. Both have to remain above the threshold (high-teens growth, 30%+ margin) to support the consolidated multiple.

Second, retail operating margin. The 6%+ ceiling reached in late 2024-2025 is the structural ambition; sustainability through tariff pressures is the bull-bear question.

Third, advertising revenue trajectory. At $60 billion-plus annualized, it is approaching Meta-scale impact on consolidated EBIT.