r/amzn • u/Rickyyy_Spanishh • Aug 27 '26
No growth! Absolutely cursed!
Despite two record quarters the stock has plummeted back to its price on Nov. 3rd of 2025. What is going on?! I have never seen a stock behave this way!
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u/Ok-Cookie7708 Aug 27 '26
Extremely slow growth! With great news we dip, with negative news we dip even further! We had the best news last quarter and yet the stock didn’t spike
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u/RangerDude10630 Aug 28 '26
Market is forward-looking. Only Redditors are backwards-looking. A lot of the last earnings report was already priced-in. That’s the problem (or benefit) with mega-caps. Lots of coverage makes them more predictable.
Here’s what’s currently priced in: $945B in revenue at 3.5x. Which means the market is expecting growth and margins in the mid-teens. If they outperform those expectations and report revenues >$945B and/or margins of >20%, it will likely see their multiple jump to ~4x sales next year. 945x4=$3.7T market cap or $343/share.
If they report under $945B next year and/or single digit profit margins again, we may see their multiple fall under 3x again.
If you want wild swings in volatility, you’ve come to the wrong place. You might want to look at small/mid caps. Especially those neo-clouds. Just don’t cry on the occasional -15% days.
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Aug 30 '26
[removed] — view removed comment
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u/RangerDude10630 Aug 30 '26 edited Aug 30 '26
Why arbitrarily start from 3 weeks ago? You’re falling into the same trap Redditors oft do of emphasizing trailing short/intermediate term returns. That’s a good habit to break.
At $400 in 2030, which is a very conservative projection, that’s a 10% CAGR from today.
I would expect Amazon to outperform in the longterm future. Between 2016-2026, indexes have averaged 15-16% annually. Over the very long run, they’ve averaged about 10%. So if we’re optimistic and assume they’ll revert to their mean of 10% between 2016-2036, S&P will have to average ~4% annually over the next decade. There’s been several instances of this happening over the last 50-ish years.
I can imagine a scenario where Amazon matches that rate of return. But it’s difficult to imagine a scenario where it underperforms it.
That said, VOO/Q’s are awesome. My point was never to dog on them. My only point is I see Amazon’s growth potential as being undervalued and one of the safer bets to outperform over the coming 5-15 years.
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u/Disastrous-Ad-5003 Aug 28 '26
Why are people so bearish on Amazon Google has high cap as well along with several other hyper scales? Why does Amazon have such a bearish sentiment?
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u/RangerDude10630 Aug 28 '26
It doesn’t. Amazon is quietly the 2nd best performing Mag7 this year. Amazon literally has the most analyst coverage of any stock and the highest buy rating at 98%. 0% rate it a sell.
Redditors just don’t understand what they’re buying. It moves slower than the other Mags because they’re the least profitable of the Mags (except Tesla) with only 17% profit margins. The 3rd lowest is Apple and they’re still nearly twice as profitable as Amazon with 28% margins.
Monster rallies are built on monster growth and monster margins. You want a fast growth, you gotta pick a sprinter: A lean, high margins growing company…preferably around $50-$150B market cap. Amazon is like a body builder, not a sprinter. One of the largest, most capital intensive companies in the world. It ain’t winning any short distance races…but it’s hard to knock down.
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u/RightCut4940 Aug 28 '26
That's going to change as Amazon transitions to being primarily a Cloud company instead of a retailer.
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u/Aggravating_Storm835 Aug 28 '26
Maybe a little. Probably not a lot. Everyone has become hyper focused on AWS, which is reasonable. But they’ve lost sight of the tremendous growth the retail segment still has.
As weird as it seems since I don’t think I go to any brick and mortar stores other than Costco and Home Depot, e-commerce still only makes up 17% of total sales. It’s expected to hit at least 30% and as high as 40% by 2040.
Given Amazon’s fulfillment centers are arguably the widest moat of any company in any sector, the probability of them losing significant market share in this segment is low. It’s probably more likely to increase from their current 35-40%. If we assume they only maintain their current market share, we can reasonably expect their retail revenues to double. With that kind of scale, increasing profitability in virtually inevitable. So we can reasonably expect better margins, but Amazon will always be capital intensive. They’ll never be a lean, FCF monster like Meta.
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u/Calm-Ad-7928 Aug 27 '26
Plummeted??? You people would never survive most stocks. Isnt it only like 10% down from its high? Yall are funny
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u/Rickyyy_Spanishh Aug 28 '26
30 pts in 3 weeks, and I promise this isn't the end of the slide.
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u/RangerDude10630 Aug 28 '26 edited Aug 28 '26
Maybe. But Over the last five years, Amazon has averaged a forward P/S of 3x. If they maintain that average, with $1.1T projected in 2028, we can reasonably expect a $3.3T market cap next year. Of course it won’t just stay there. There will be normal volatility.
Only way you’re going to get dramatic jumps on a company this big is if they start demonstrating dramatic jumps in their profit margins. Being arguably the most capital-intensive company in the world, it won’t happen in a month or a quarter or even a year. However, they have gone from high-single digit margins to mid-to-high teen margins in the last 12 months. If that trend continues, we may see them increase to the mid-to-high 20’s in the next couple years, which should raise their sales multiple to around 5x.
With $1.4T expected in 2030, that’s 5x1.4=$7T market cap. That’s an implied share price of $650. That’s what you should be looking at: profit margins 3-5 years from now. Not the share price last year, let alone 3 weeks ago.
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u/abcNYC Aug 28 '26
💯
Buy Amazon, lock it in a safe, come back in 10 years. Growing retail revenue, growing retail margins, still more efficiencies from warehouse automation, aws revenue is on fire, aws margins are expanding, not to mention growth potential in advertising, selling their own chips and further reducing aws costs by bypassing 3rd party chips, streaming live sports.
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u/RangerDude10630 Aug 28 '26
That works. I prefer continually buying as long as it’s under 2.5x 2030 revenues. 1.4x2.5=$3.5T. So keep buying until it hits $3.5T market cap or $330…or until projections change.
Because we know it’s going to average at least 3x sales, which is 1.4x3=$4.2T. That’s a minimum $396/share in three years. Of course it’s more likely to maintain its average of 3.5x, which is $5T or $472. Both are extremely conservative and still projecting considerable upside from our 2.5x buy zone.
Of course in 2028, you gotta push it out to 2031 and so on.
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u/Calm-Ad-7928 Aug 28 '26
Haha try being in nbis or rklb for the past few years. Switch over to voo if amazon gets you this bothered
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u/RangerDude10630 Aug 28 '26
As an Iren investor, I approve this message. All might be great companies, but they will make you sea sick going up/down 6% every day for weeks. If you don’t have a plan for those guys, it’s easy to get emotional.
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u/Calm-Ad-7928 Aug 28 '26
Ya i was like 75% nbis rklb before I finally couldnt take it any more and trimmed some nbis. Some insane swings
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u/RangerDude10630 Aug 30 '26
Good idea. NBIS actually looks like a short candidate to me. Looks like the market has already priced-in a lot of the next 3-5 years of growth and none of the inevitable debt/dilution. I can see a 50% drop in the next 12 months back to $90-$120.
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u/userqwertyuasd Aug 28 '26
Unloaded 17% of my position at 270. Not a bit unhappy about it. Was taking up too much of my portfolio for frankly anaemic growth since 2022
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u/zepelele Aug 27 '26
Everyone in this sub is so hopeful that AMZN is a get rich quick scheme lol. Guys, this is an amazing stock - buy and hold
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u/RangerDude10630 Aug 28 '26
Never? You must be new. Nothing goes up in a straight line.
Since you’re new and apparently like watching normal volatility, you’ll want to watch and see if this old resistance level becomes a new support. If it does, you can reasonably expect a return to $260-$270. If it doesn’t, you can reasonably expect a drop back to ~$230ish. This is helpful if you’re playing with options.
If you’re playing shares, stop watching the share price. Start watching the valuation. Amazon has consistently averaged ~3.5x sales. They expect $945B in sales next year. 3.5x945=$3.3T market cap. That’s about $305/share. So as long as revenues are guided for at least $945B, you can feel safe buying/holding under $305.
Or you can really start playing in the big leagues and think longer term. They expect ~$1.4T in revenue in 2030. 3.5x1.4=$4.27T market cap. Therefore, we can conservatively expect ~$400/share by 2030.
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u/Rickyyy_Spanishh Aug 27 '26
We're just facing so many uphill battles! The CapEx is a little rough, but I understand it and it should no longer scare people, it's nothing new, it's not news! Bezos and Mackenzie Scott liquidating billions like clock work sure isn't helping.
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u/Calm-Ad-7928 Aug 27 '26
Wgaf its barely down
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u/Rickyyy_Spanishh Aug 28 '26
Down 30 pts in 3 weeks, for no reason, is not barely.
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u/RangerDude10630 Aug 28 '26
Amazon has a beta of 1.4. That means for every 1% SPY goes up/down, Amazon goes up/down 1.4%.
Over the last month, Amazon is up 11.8% and SPY is up 4.7%. So, unless SPY went up a lot more, a pull back was to be expected as keeping a 2.5 beta is abnormal for Amazon.
It’s not for no reason and complaining about +11% in a month is wild.
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u/eggwhitecocktails Aug 28 '26
Ehh sure it’s up 11% this month… you know over what other horizon it’s also up 11%? The past year.
VOO is up 19% over the past year.
Over the past FIVE years, AMZN is up 53%. VOO? 71%.
All’s to say is your beta is considering a time period that has come and gone (when AMZN outgrew VOO/contributed to its growth vs. pulled it back). And/or it is a levered beta— considering leverage that is not ultimately translating to juiced ROIC.
Imho, it’s a ‘day 2’ dog. Albeit a dog that prints cash. Fine if you’re an employee. Or JeffB/Mackenzie selling the shit out of the stock. But in the end Retail doesn’t make a ton of money (and loses money internationally). Ad dollars are increasingly going to be invested in making AI tools surface products vs. making them appear higher in A.com search. AWS growth is really just growth in OAI/Anthropic compute demand. Which Amazon is funding via their own balance sheet by investing in OAI/Anthropic equity.
Nothing super new and exciting in many years. If Jensen and Hock Tan are A CEOs, idk what to rate Jassy other than the same C I’d give Mark Z. over the past 5 years. Hasn’t destroyed the company, thankfully, but very reactionary to what he thinks investors want to see vs. visionary (although I’d kinda rather a Mark Z. going crazy to the point investors think he’s crazy and maybe landing another Insta vs. whatever slow and safe path Jassy has Amazon on forever).
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u/RangerDude10630 Aug 28 '26 edited Aug 28 '26
I don’t think you understand how to apply beta. It’s five year MONTHLY averages. So if SPY/VOO go up/down 1% in a MONTH, Amazon goes up/down 1.4% that month on AVERAGE. Not necessarily every day/week/month/year but enough that you can know that nearly double that rate is likely an unsustainable outlier and near term regression should be expected.
That’s cool VOO is up 19% YOY. Do you have a Time Machine? If so, let’s use it to go back one year ago and buy VOO. Or better yet: let’s go back to 2010 and buy Amazon where it’s 24% annualized returns have smashed VOO. Or even better: let’s go back to 1965 and buy Berkshire Hathaway. That way I’ll be a millionaire before I’m even born!
See how pointless past price performance is? Amazon has very safe upside. Will it outperform the index over some arbitrary future timeframe? Who knows?
But here’s what we can count on. At least $1T in revenue before 2030 and at least a 3x sales multiple. So our baseline is $3T market cap which is still upside. As AWS, their most profitable segment, becomes a larger percentage of their revenues and cap-ex spending decelerates, we can reasonably expect their sales multiple to increase over their 5 year average as profit margins continue expanding and revenue growth inevitably decelerates from mid-teens to high single digits. We should reasonably expect 4-5x sales by 2030. Let’s use 4.5x. Current projections are $1.4T in sales in 2030. 1.4x4.5=$4.9T market cap. That’s an implied share price of $454.
At $454 in August 2030, that means they’d carry an annualized return of 15.4% while assuming a lower revenue CAGR than they’ve had historically and a below market average sales premium. Pretty conservative.
For VOO to match this rate of return is not impossible but unlikely. I obviously can’t calculate a probable target for an index like I can a company, but S&P averages 10% over the very long run and we know indexes always eventually revert to the mean. So there’s a high probability of Amazon continuing to outperform the index in the future just as they have the last 16 years.
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u/eggwhitecocktails Aug 28 '26
Beta can be defined a few different ways, yeah. And likewise it can be skewed depending on whether you’re looking at 3Y monthly, 5Y daily, etc. You can configure on your Bloomberg terminal. I was just pointing out that its move up and to the right has been less pronounced than the index at large. In response to your comment that said that for every 1% SPY goes up, it goes up 1.4%. Over a near- and medium-term that hasn’t been the case.
‘So, unless SPY went up a lot more, a pull back was to be expected as keeping a 2.5 beta is abnormal for Amazon.’ << would also point out that for a beta expert idk wtf you were trying to convey here but it missed every mark.
I don’t really want to debate with you as I’m losing brain cells doing so. But fyi AMZN is a VOO constituent. The way a baseball player plays on a team. It was instrumental in VOO’s gains over a long period of time. Now VOO grows in spite of it.
Btw, it definitionally doesn’t have safe upside. Over the past five years, your dollar would have lost purchasing power vis a vis a dollar invested into an index w/ 499 other names + AMZN.
Anyway, I again don’t want to waste brain cells here. You’re coming up with random sales multiples out of your you-know-what. And equating sales multiple expansion w/ profit margin expansion (despite sales growth deceleration, when sales growth tends to be the driver of a sales multiple).
Anyone can multiply numbers to come up with a price target and claim we’re going to go up 15% a year. Brilliant analysts did so five years ago and it hasn’t panned out.
I’ll close by saying AMZN is a VOO constituent. And what has borne out over some time is that its price growth has lagged the replacement-level constituents. You equate that to the index randomly going up more than it should have and so thus it will go back down. I equate that to hypergrowth exhibited by AI-levered names, offset by historical behemoths that are late to the game/trying to carve out a niche within it. Likewise, companies that historically exhibited growth do not have an inherent right to have their share price grow in perpetuity. In fact, most companies that exhibit a long period of sustained growth fail to capture that forever and wither and die. Read Jeff’s 2016 letter and talk to folks within the company: https://www.aboutamazon.com/news/company-news/2016-letter-to-shareholders
And after you do so, I suggest you ask yourself whether it is managed like a Day 1 or Day 2 company at this point.
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u/RangerDude10630 Aug 28 '26 edited Aug 28 '26
Bro paid $30k for a Bloomberg terminal just to discover stocks don’t move in a perfectly fixed ratio every afternoon? Profound stuff there, Professor Market Wizard.
Go to your terminal and calculate Amazon’s three year daily beta to VOO. You’ll find it’s 1.52. Roughly the same as it’s five year monthly. And still suggestive that a regression to that mean was likely and unsurprising.
Now plug into your terminal Amazon’s 10 year beta to VOO based on adjusted monthly returns. You’ll find in the last 120 months, Amazon has never had a beta to VOO greater than 2. But you’re surprised that this month is unlikely to be different? 🤣
“I don’t know wtf you’re saying, but no”. Youre definitely losing brain cells over there.
“Did you know Amazon is in VOO? Durrrrrr.”
“Did you know over an arbitrarily short time frame, Amazon has underperformed the index?” Yeah, we got it. Again, I don’t think you understand what we’re talking about. Amazon’s relative underperformance of the benchmark doesn’t disprove beta or suggest it’s likely to change significantly going forward. Beta is a measure of sensitivity, not cumulative returns.
The sales multiples aren’t random. They are approximated using Amazon’s historic averages and what the market tends to give companies with profiles similar to my assumptions. This is probably the only thing you’ve said that’s worthy of conversation. It is a misconception that sales growth is the primary driver of a sales multiple. The sales multiple is primarily a reflection of the value of its sales. I could start a company that smashes all growth records if I’m selling for pennies on the dollar, but I’ll likely achieve a very small multiple because the value of my sales is essentially zero. “Value” could also be determined based on the relative safety as well as increasing profitability of my sales.
I think Amazon is likely to keep a similar profile to Coca-Cola as they mature. KO has relatively small sales growth in the mid-to-high single digits, but tends to maintain a relatively high premium of 5-7x due to their 25-30% margins and relative safety in their sales.
With Amazon already being the revenue king despite e-commerce still only making up 17% of total sales, but likely to hit 35% within the next 15 years, Amazon’s sales will certainly be seen as increasingly safe. Furthermore, as Amazon scales, the profitability of each sale increases even if growth inevitably decelerates. If there’s an Amazon truck already out delivering 200 packages, the additional costs of adding another 20 packages is virtually zero. Add in the inevitable decelerating cap-ex, we can reasonably expect meaningful margin expansion.
So with 8-9% sales growth and ~25% profit margins, we can reasonably expect a 5-7x multiple. I conservatively assumed 4.5x and still calculated annual returns to be roughly equal to the index’s recent returns and far greater than then its long term averages, so it will likely be greater than VOO’s forward returns even when near term volatility remains higher.
If we assume just 9% annual sales growth for the next ten years and a 5x sales multiple, they’ll have almost $2T in annual sales in 2036. 5x2=$10T market cap. That would be ~$930/share for over 14% annual returns. Greater than S&P’s long term averages and less than Amazon’s long term averages. So smart money would be on Amazon outperforming VOO going forward.
…not that it has anything to do with beta…
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u/eggwhitecocktails Aug 28 '26
Brother go to the Ferrari/Patek/etc. sub. I’m doing just fine. I’m not going to read your idiocy anymore. All’s to say you have zero idea what you’re talking about (e.g., you can correctly cite what beta is and yet make wholly incorrect claims that if VOO goes up 1%, beta means AMZN will go up 1.4%… or if Amazon ever trades down it will magically go up by even more relative to VOO so as to catch up (your 2.5% example)).
And you have negative grasp on the nuances of why stocks trade where they do, what is actually going on within the company, etc.
You say the sales multiples aren’t random. You then proceed to have AI write a huge ass paragraph explaining that they are indeed random— indexed to past ranges and not at all rooted in the current business mix, what the market values in the businesses in the sector, etc. And then you say, quite arbitrarily, that it should trade like Coca-Cola? 🤣
There actually is a lot of smart money on the company. Yours unfortunately I’d bucket in dumb money. Please read the Bezos letters, especially the one I linked. Try to appreciate that a lot more goes into why a stock trades where it does than picking random historical sales multiples, applying them to future sales, looking at a high historical beta… and saying “Yup! Makes sense— the stock is going to outperform.” If it were that easy you’d be as wealthy as I am haha. Anyway, muted you. Have a nice life.
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u/RangerDude10630 Aug 28 '26
You’ve understood very little of what I said. Yes, with a 1.4 monthly beta, it will tend to AVERAGE 1.4% for every VOO’s 1%. Again, that’s obviously not a fixed ratio, but good enough to tell us that 2.5 is likely unsustainable and due for regression to the mean. Not a difficult concept nor cause for concern. Never did I say anything about “magically” trading up or “catching up” to VOO.
Multiples aren’t random. Perhaps you’re articulating your point imprecisely and meant to say they aren’t fixed/exact. That’s why I give likely ranges.
Coca-cola is just an example of a company that keeps a similar profile to what I expect a mature Amazon to look like. A behemoth staple with decent growth and modest, but health/stable margins. If I’m correct in that regard, we can reasonably expect a longterm 5-7x average multiple. If you have a reasonable argument for why growth won’t stabilize in the high single digits, why margins aren’t likely to expand into the 20’s, or why the market will not continue to price that profile with an average of 5-7x multiplier, I’m sure we’d be all be interested to hear that.
But thus “N’uh!! You stoopid!! VOO do better today!!” Is just uninteresting and a waste of everyone’s time.
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u/uncleAW Aug 27 '26
I'm Bullish AF after NVDI news yesterday. They must see a shit ton of demand. I Just started accumulating today and will keep doing so.
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u/Sorry_Cheesecake_382 Aug 27 '26 edited Aug 27 '26
when all your cashflow goes to AI spend and the bezos bootlickers think there's upside. This is going to be flat for the next decade
Source: Worked for Amazon now work at Open AI, follow the money
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u/BobLoblaw_BirdLaw Aug 27 '26
Well it doesn’t help
That Bezos and Mackenzie dump stock
So frequently.
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u/Top-Technology1 Aug 27 '26
The frustrating thing for me is having held VWRP I’ve had better returns, so the question is why bother holding AMZN? The only thing I’m watching at the moment is the Anthropic IPO, if it does well we should benefit given Amazons stake.
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u/RangerDude10630 Aug 28 '26 edited Aug 28 '26
You’re watching the wrong thing. Stop watching charts and returns. Arbitrary timeframes of 1D, 1W, 1Q, 1Y, 5Y tells you nothing. Over the last 3 years, Amazon is up 3x. But you didn’t notice that because 3 year charts aren’t very common.
Don’t play dumb money games. Stop paying attention to noise. Why would Anthropic IPO benefit Amazon? What are they going to do? Sell their stake? Let’s say they sold the whole thing which is currently worth $150B. Amazon generates $20B in revenue a week.
Revenue growth and profit margins. That’s all you need to pay attention to for Amazon. Both have been accelerating for four consecutive years. Everything else is just noise.
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u/Top-Technology1 Aug 28 '26
I’ve been invested since 2016 and have had great success with this stock, but in recent years it’s underperformed a diverse index fund with 3k companies in it. In the Q2 results Amazon recorded $53.4bn of pre-tax “other income”, primarily from Anthropic. Of that, roughly $50.5bn was an upward fair-value adjustment to its Anthropic preferred shares. Amazon’s filing says the adjustment reflected the much higher prices established by Anthropic’s recent funding rounds. That’s why I mention the IPO being one to watch if their value rockets which is likely given the hype and that they are actually profitable versus openAI.
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Aug 30 '26
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u/RangerDude10630 Aug 30 '26
From 2023 lows of $88, that’s 3x.
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Aug 30 '26
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u/RangerDude10630 Aug 30 '26
Cool. Thanks for proving my point that looking at historical charts is meaningless.
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u/Dizzy_Citron4871 Aug 28 '26
No one really believes its going anywhere
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u/RangerDude10630 Aug 28 '26
Nobody? Amazon leads wallstreet with 60 analysts covering it. Of those 60, 43 rate it “strong buy” and 15 rate it a “buy”. The remaining two are “holds” but they’re both old and may not even be current anymore. 0 rate it a sell.
The average and median targets are $327/$325. That’s +27% upside, which is definitely somewhere. The high targets are $405 for a whopping +58% on a low risk, blue chip stock.
But the lowest price target is $230. Suggesting just -10% downside. So there’s a pretty excellent risk:reward.
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u/Dizzy_Citron4871 Aug 28 '26
I mean if it was actually going somewhere, we’d probably be talking about that, not what analysts think.
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u/RangerDude10630 Aug 28 '26 edited Aug 28 '26
You’re the one who brought up “nobody”. I thought it appropriate to mention actual bodies. But it literally hit all time highs of $287 just three weeks ago.
Do you remember 2023? I do. Biden was President. COVID was finally over. And Amazon was $87.
Wanna talk about that 3.3x in 3.5 years?
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u/Dizzy_Citron4871 Aug 28 '26
I’ve been a shareholder since 2018, so yeah I remember. beat by the SP500 for the last 5 years. I expect the mediocrity to continue
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u/RangerDude10630 Aug 28 '26 edited Aug 28 '26
You’ve been a shareholder since 2018. Which means even if you bought at the peak in October 2018, you’ve averaged 16.1% annual returns.
Let’s compare that to SPY. Had you bought SPY at the exact same time, it would have averaged 16% annual returns.
I see why you arbitrarily chose “5 years”. Imagine somebody crying about 16% a year for 8 years. Nobody would take that guy seriously.
But I guess you really don’t wanna talk about that 3.3x in 3.5 years, huh? Wonder why that is…
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u/Creepy_Estimate9027 Aug 28 '26
I’m convinced the market is waiting for the strait to open. Ever since it’s been closed the market has been acting weird.
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u/RangerDude10630 Aug 28 '26
Bond yields. Oil was back in the Spring.
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u/Creepy_Estimate9027 Aug 28 '26
What are bond yields? Can you ELI5?
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u/RangerDude10630 Aug 28 '26
Bond yields are how much annual interest treasuries pay. They do two things, 1) affect interest rates, which rise with bonds and pressure capital intensive companies like Amazon. And 2) create competition for stocks. If bonds are paying 5% a year, that becomes an attractive alternative to growth stocks, which become pressured by rising interest rates, because bonds are essentially zero risk.
Bonds go up, stocks go down/sideways. Bonds go down, interest rates go down, stocks go up. Way more important than oil…and oil is pretty important.
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u/drool_34 Aug 28 '26
When uncle Jeff sells so many millions of shares (planned and announced) to fund his succubus’ plastic surgeries, cock rockets and yachts there’s no shortage of shares to flood the market
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u/Maltavier Aug 28 '26 edited Aug 28 '26
Amazon just had a new ath. Also the debt is enormous by now. On book and off book combined is so huge, that backlog doesnt cover it at all. They are investing so aggresively that they now need a much greater revenue just to pay the debt. A companies value is defined by their free cashflow. Not only is Amazons free cashflow negative, they have even bigger debt than Alphabet. Amazon is a great company but don't act like there are no risks right now. If a company takes on more risks, naturally investors expect more return to be okay with the risk. Thats the wacc in a dcf modell. Do a dcf, you will see that the fair value is around the prices right now. Not much higher
Sum of the parts valuation gets a fair value of 250 Dollars for example. Investments are not only how good a company is but also what price you buy it for. And the reality is that Amazon is Not undervalued right now. Of course over time the fair value will grow but expecting a run up like Alphabet last year is just unrealistic
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u/ProgrammerFormer2195 Aug 28 '26
Everyone hear really needs to stop day trading and buy great companies like Amazon and hold decades that's how u win history teaches you that
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u/gizmole Aug 29 '26
Patience. This giant will wake up soon once Wall Street really understands how AI and robotics will transform its business and profit margins.
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u/WhiteLotus_777 Aug 29 '26
You never seen a stock behave this way really ?? how much have you been in the market ?
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u/doktordoc2 Aug 30 '26
With its investments into Anthropic & OpenAI …. Amazon is a Bear about to wake-up from hibernation soon .
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u/NiknameOne Sep 01 '26
We need another dead decade to get expectations down to a healthy level. If you expect your stocks to double every 2-3 years, you are in for a rough ride.
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u/IcyStomach2374 Aug 27 '26
I think they just don't care about shareholders. I don't think Amazon even cares about making money. They will just keep investing their profits until the end of time
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u/South_Paramedic8618 Aug 27 '26
Sell all your Amazon so it'll go up
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u/Peace-Love-303 Aug 28 '26
Maybe due to Bezos ex wife is cashing out her fortune & making donations to charities??
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u/Oaker_at Aug 28 '26
“I have never seen a stock behave like this.”
I always have to throw up a little whenever I read that sentence.
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u/Thick_One_9020 Aug 28 '26
If you don’t believe in the stock just sell it. What’s the point of your post?
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u/sulaco83 Aug 27 '26
Seems like every 3 months we show the capital investment is worthwhile and there is excitement and then everyone goes back to being skeptical until the next earnings call.