Amazon: A Mildly Interesting Investment

by

Amazon (AMZN +1.59%). Yes, that Amazon. The one that delivers practically everything, often before you realize you needed it. It’s been, shall we say, a reasonably successful investment over the last decade – a climb of 632% as of February 23rd. Which, when you think about it, is a rather large number. It’s currently experiencing a temporary dip, a mere 19% off its peak, which, in the grand scheme of cosmic events, is statistically insignificant. But investors are noticing. And that, as they say, is the beginning of everything… or possibly nothing. It depends on your perspective. And the price of tea in China, naturally.

So, is now a good time to acquire a small piece of this sprawling, slightly terrifying behemoth? Let’s investigate. Though “investigate” implies a degree of rigor that may not be entirely warranted. Let’s just… look at it. From a distance. With binoculars.

Pushing the Business Forward (Or Sideways, Occasionally)

Anyone even remotely aware of the current state of technological advancement will know that Amazon Web Services (AWS) has become a dominant force in the world of cloud computing. It collected $129 billion in revenue last year, which is, frankly, a lot of money. Enough to buy a small country, probably. Or a very large collection of rubber ducks. It generated $46 billion in operating income, representing 66% of Amazon’s total. Which means, roughly two-thirds of everything Amazon earns comes from storing other people’s data. Think about that for a moment. (It’s probably safer not to dwell on it too long.)

But it’s not just the numbers that are impressive. AWS is strategically positioned to benefit from the ever-increasing demand for cloud computing, and, more recently, the insatiable appetite for artificial intelligence (AI). Apparently, everyone wants an AI now. (Though what they do with it is another matter entirely. Probably generate more cat videos.) According to CEO Andy Jassy, AWS is excelling in the AI space because of its “uniquely broad top-to-bottom AI stack functionality.” (Which, translated from corporate jargon, means they have a lot of wires and computers.) He also stated they’re “solving customer challenges.” (Which, let’s be honest, is what all businesses claim to do.)

Retail Shouldn’t Be Overlooked (Though Many Try)

Amazon, you may recall, started as a place to buy books. Now it sells practically everything else. It disrupted the retail sector with its massive selection, low prices, fast delivery, and generally agreeable customer experience. It continues to dominate, with revenue from online and physical stores growing over 9% year over year to $88.9 billion in Q4 (ended December 31, 2025). The North America segment posted a 9% operating margin, up from 8% the previous year. A whole percentage point! The implications are… significant. (Or possibly not.)

Management remains focused on penetrating the grocery vertical. Through online channels and Whole Foods, Amazon sold over $150 billion worth of groceries last year. And they plan to open more than 100 new Whole Foods stores in the coming years. (Which, one assumes, will sell even more groceries. It’s a surprisingly effective business model.)

Loading widget...

Investors Might Be Surprised by the Valuation (Or They Might Not)

Amazon is, undeniably, a gargantuan enterprise, with $717 billion in 2025 net sales and a market cap of $2.2 trillion. It doesn’t exactly fly under the radar. So, investors might be surprised to learn that the valuation isn’t entirely unreasonable. In fact, it’s rather attractive at the moment. Shares can be bought at a price-to-earnings ratio of 28.3. Which, in the grand scheme of things, is… well, it’s a number. And a relatively low one, considering the sheer scale of the operation. If you’re considering an investment, now might be a reasonably good time. Or a terrible one. It’s really all a matter of perspective. And the alignment of the planets, naturally.

Read More

2026-02-25 12:12