AMZN
AMAZON COM INCNasdaqValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Sep 4, 2026 · Valuation Sep 5, 2026
What drives AMZN's base case?
base-case thesisAmazon's recent growth accelerated because retail demand improved while cloud and advertising expanded much faster than the company as a whole. Those higher-earning services should become a larger part of the business and raise profitability. The benefit is partly held back by a major data-center buildout, so cash conversion improves more slowly than accounting profit.
What shapes the assumptions
AWS growth accelerated from 17% to 37% across the six reported quarters
AWS constant-currency sales growth
Raises revenue growth
Advertising growth reached 26% in the latest quarter
Advertising constant-currency sales growth
Raises operating margin
Latest-quarter company profitability reached about 13.7%
Company operating profitability
Raises operating margin
Latest-quarter cash capital expenditures rose to $53.1 billion
Quarterly cash capital expenditures
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 61.1% a year. Over the last 5 years it grew 11.8% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- How confident is this estimate?
- Robustness 52.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. AWS quarterly constant-currency growth
This measures year-over-year cloud-sales growth, which is the largest observable driver of Amazon's consolidated growth and profit mix.
37.0%
reported2. AWS quarterly operating margin
This measures the cloud segment's operating income per dollar of sales and indicates how strongly cloud mix can lift company-wide profitability.
39.4%
reported3. Advertising quarterly constant-currency growth
This tracks growth in Amazon's advertising services, a service stream that can increase revenue without requiring merchandise inventory.
26.0%
reported4. Quarterly cash capital expenditure intensity
This measures cash capital expenditures as a share of same-quarter sales and shows how much current revenue must be reinvested in infrastructure.
26.5%
derived5. Worldwide quarterly paid-unit growth
This measures year-over-year growth in units sold through Amazon's stores and is a direct indicator of underlying retail demand.
17.0%
reportedBase inputs from financials
source period →Base revenue (TTM)
$775.7B
Diluted shares
10,903,000,000
Net cash
-$9.2B
Bear
low confidence$10.70
IV / share
-95.9% vs $258.90
- Explicit cash flows
- $3.25
- Terminal value
- $8.30
- Net cash
- -$0.85
- Intrinsic value / share
- $10.70
77.6% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
bear revenue growth (avg 9%) runs well above the trailing -8% trend
Revenue growth12.0% → 10.0% → 8.5% → 7.0% → 5.5%medium
How derived: Starting from 0.20 second-quarter growth but management's 0.09 to 0.12 third-quarter guidance, this path assumes cloud and advertising remain healthy while retail growth normalizes and Amazon's scale steadily limits expansion.
Why this confidence: Near-term management guidance ↑, Five-year segment-mix uncertainty ↓
Measured by
- AWS quarterly constant-currency growth37.0%reported
- Advertising quarterly constant-currency growth26.0%reported
- Worldwide quarterly paid-unit growth17.0%reported
Evidence for
- Management guided third-quarter 2026 sales growth to 0.09 to 0.12, substantially below the second quarter's 0.20.[Amazon Q2 2026 results]· primary
Evidence against
- AWS grew 0.37, advertising grew 0.26, and consolidated sales grew 0.20 in the latest quarter, leaving room for faster company-wide growth.[Amazon Q2 2026 results]· primary
Operating margin12.0%medium
How derived: Starting from the latest quarterly margin near 0.137, this case assumes slower high-margin mix gains and elevated shipping, infrastructure, satellite, and commerce investment pull profitability back toward 0.12.
Why this confidence: Reported consolidated and segment profitability ↑, Uncertain investment intensity and business mix ↓
Measured by
- AWS quarterly constant-currency growth37.0%reported
- AWS quarterly operating margin39.4%reported
- Advertising quarterly constant-currency growth26.0%reported
- Quarterly cash capital expenditure intensity26.5%derived
- Worldwide quarterly paid-unit growth17.0%reported
Evidence for
- Amazon reported rising shipping, fulfillment, and technology infrastructure costs, and said additional AI investment would continue affecting results.[Amazon Q2 2026 Form 10-Q]· primary
Evidence against
- Second-quarter operating income increased 0.43 while sales increased 0.20, and AWS produced a 0.394 segment margin.[Amazon Q2 2026 results]· primary
Tax rate24.0%medium
How derived: Starting from Amazon's 0.196 effective rate in 2025, this case adds a cushion for state, foreign, and cross-border taxes and for less benefit from credits or stock compensation.
Why this confidence: Three years of disclosed tax reconciliations ↑, Discrete items and international tax uncertainty ↓
No tracked driver measures this assumption yet.
Evidence for
- Amazon identifies jurisdictional mix, tax-law changes, controversies, and nondeductible items as causes of significant effective-rate variation.[Amazon 2025 Form 10-K]· primary
Evidence against
- Amazon's reported effective tax rates were 0.19 in 2023, 0.135 in 2024, and 0.196 in 2025, all below this assumption.[Amazon 2025 Form 10-K]· primary
Reinvestment rate90.0%medium
How derived: Starting from first-half cash capital expenditures of $96.3 billion and trailing free cash outflow of $7.6 billion, this case assumes 0.90 of after-tax operating profit continues to be absorbed by capacity, working capital, and other reinvestment.
Why this confidence: Current cash-capex disclosure ↑, Uncertain normalization after the AI buildout ↓
Measured by
- AWS quarterly operating margin39.4%reported
- Quarterly cash capital expenditure intensity26.5%derived
Evidence for
- First-half cash capital expenditures rose from $55.6 billion to $96.3 billion, mainly for technology infrastructure supporting AWS, and Amazon expects infrastructure and fulfillment capacity investment to increase in 2026.[Amazon Q2 2026 Form 10-Q]· primary
Evidence against
- Trailing operating cash flow grew 0.33 to $161.4 billion, providing substantial internal funding for investment.[Amazon Q2 2026 results]· primary
Terminal growth2.0%low
How derived: Starting from the Federal Reserve's longer-run medians of 0.02 real growth and 0.02 inflation, this case assumes Amazon eventually grows only at the inflation rate as competitive pressure offsets its remaining market-share opportunities.
Why this confidence: Official long-run macroeconomic benchmark ↑, Very long forecast horizon ↓
No tracked driver measures this assumption yet.
Evidence for
- The Federal Reserve's longer-run inflation projection is 0.02, providing a conservative nominal floor for a mature company's steady-state growth.[Federal Reserve June 2026 projections]· primary
Evidence against
- The same Federal Reserve projections imply roughly 0.04 longer-run nominal economic growth when 0.02 real growth and 0.02 inflation are combined.[Federal Reserve June 2026 projections]· primary
Base
low confidence$45.28
IV / share
-82.5% vs $258.90
- Explicit cash flows
- $11.95
- Terminal value
- $34.17
- Net cash
- -$0.85
- Intrinsic value / share
- $45.28
75.5% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
base revenue growth (avg 11%) runs well above the trailing -8% trend
Revenue growth15.0% → 13.0% → 11.0% → 9.0% → 7.5%medium
How derived: Starting from trailing revenue of $775.68 billion, latest-quarter growth of 0.20, and third-quarter guidance of 0.09 to 0.12, this path assumes AWS and advertising keep raising the blended rate above mature retail growth before scale produces gradual deceleration.
Why this confidence: Detailed segment and product-category trends ↑, Rapidly changing AI demand and scale effects ↓
Measured by
- AWS quarterly constant-currency growth37.0%reported
- Advertising quarterly constant-currency growth26.0%reported
- Worldwide quarterly paid-unit growth17.0%reported
Price implies: 61.1% vs our 11.1% — one of several sets that fit this price
Evidence for
- AWS growth accelerated from 0.17 in each of the first two quarters of 2025 to 0.37 in the second quarter of 2026, while advertising reached 0.26 growth.[Amazon Q2 2026 results]· primary
Evidence against
- Management's third-quarter guidance calls for only 0.09 to 0.12 reported growth, although the company said Prime Day timing reduces the comparison by nearly 0.04.[Amazon Q2 2026 results]· primary
Operating margin16.0%medium
How derived: Starting from a latest-quarter margin near 0.137 and AWS's 0.394 segment margin, this case assumes a larger cloud and advertising mix plus retail efficiency lifts consolidated profitability to 0.16 despite ongoing investment.
Why this confidence: Improving reported profitability and service mix ↑, Infrastructure and new-business spending ↓
Measured by
- AWS quarterly constant-currency growth37.0%reported
- AWS quarterly operating margin39.4%reported
- Advertising quarterly constant-currency growth26.0%reported
- Quarterly cash capital expenditure intensity26.5%derived
- Worldwide quarterly paid-unit growth17.0%reported
Evidence for
- AWS generated $16.6 billion of operating income on $42.2 billion of sales in the latest quarter, while both North America and International were profitable.[Amazon Q2 2026 results]· primary
Evidence against
- Technology and infrastructure expense increased to $33.2 billion in the latest quarter, and increased shipping and fulfillment costs constrained retail segment income.[Amazon Q2 2026 Form 10-Q]· primary
Tax rate22.0%medium
How derived: Starting from the 0.196 effective rate in 2025 and the 0.21 U.S. federal statutory rate, this case adds a modest allowance for state and foreign taxes partly offset by research and other credits.
Why this confidence: Statutory rate and company tax reconciliation ↑, Volatile credits and discrete investment items ↓
No tracked driver measures this assumption yet.
Evidence for
- The U.S. federal corporate tax rate is 0.21, while Amazon's 2025 reconciliation included additional state and foreign tax effects.[Amazon 2025 Form 10-K]· primary
Evidence against
- Research credits, foreign tax credits, and stock-based compensation reduced Amazon's reported 2025 effective rate to 0.196.[Amazon 2025 Form 10-K]· primary
Reinvestment rate75.0%medium
How derived: Starting from the sharp increase in AI-related capital spending and negative trailing free cash flow, this case assumes 0.75 of after-tax operating profit is reinvested as data-center utilization improves but capacity expansion remains substantial.
Why this confidence: Reported capital spending and cash-flow data ↑, Unknown useful life and returns on AI capacity ↓
Measured by
- AWS quarterly operating margin39.4%reported
- Quarterly cash capital expenditure intensity26.5%derived
Evidence for
- Cash capital expenditures were $53.1 billion in the latest quarter versus $31.4 billion a year earlier, primarily reflecting technology infrastructure investment.[Amazon Q2 2026 Form 10-Q]· primary
Evidence against
- AWS sales and operating income grew 0.37 and 0.64 respectively in the latest quarter, suggesting current investment is supporting high incremental earnings.[Amazon Q2 2026 results]· primary
Terminal growth2.5%low
How derived: Starting from approximately 0.04 implied longer-run nominal economic growth, this case uses 0.025 because Amazon should remain relevant but cannot indefinitely outgrow the economy from its already large base.
Why this confidence: Growth rate constrained below macroeconomic benchmark ↑, Perpetual-horizon uncertainty ↓
No tracked driver measures this assumption yet.
Evidence for
- Federal Reserve participants project 0.02 longer-run real GDP growth and 0.02 inflation, leaving this assumption below implied nominal economic growth.[Federal Reserve June 2026 projections]· primary
Evidence against
- Amazon identifies intense competition across retail, cloud computing, artificial intelligence, logistics, media, advertising, and healthcare.[Amazon 2025 Form 10-K]· primary
Bull
low confidence$97.71
IV / share
-62.3% vs $258.90
- Explicit cash flows
- $23.21
- Terminal value
- $75.35
- Net cash
- -$0.85
- Intrinsic value / share
- $97.71
77.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
bull revenue growth (avg 14%) runs well above the trailing -8% trend
Revenue growth18.0% → 16.0% → 14.0% → 12.0% → 10.0%low
How derived: Starting from 0.20 consolidated growth, 0.37 AWS growth, and more than 0.25 growth in advertising, this path assumes AI demand, custom chips, faster delivery, and advertising sustain unusually strong expansion before a measured slowdown.
Why this confidence: Rapid AWS growth and large contracted commitments ↑, Aggressive five-year extrapolation from one strong quarter ↓
Measured by
- AWS quarterly constant-currency growth37.0%reported
- Advertising quarterly constant-currency growth26.0%reported
- Worldwide quarterly paid-unit growth17.0%reported
Evidence for
- AWS reported its fastest growth in 18 quarters, AI and chip businesses each exceeded a $25 billion annual revenue run rate, and long-term AWS contractual commitments reached approximately $496 billion.[Amazon Q2 2026 results]· primary
- Amazon disclosed approximately $496 billion of primarily AWS performance obligations with a weighted-average remaining life of 6.4 years.[Amazon Q2 2026 Form 10-Q]· primary
Evidence against
- Management guided the next quarter to only 0.09 to 0.12 reported growth and cautioned that customer demand, tariffs, resource availability, and macroeconomic conditions remain unpredictable.[Amazon Q2 2026 results]· primary
Operating margin20.0%low
How derived: Starting from the latest consolidated margin near 0.137 and AWS's 0.394 margin, this case assumes a much richer mix of cloud and advertising plus strong retail productivity raises company profitability to 0.20.
Why this confidence: High and rising AWS profitability ↑, Large gap from current consolidated profitability ↓
Measured by
- AWS quarterly constant-currency growth37.0%reported
- AWS quarterly operating margin39.4%reported
- Advertising quarterly constant-currency growth26.0%reported
- Quarterly cash capital expenditure intensity26.5%derived
- Worldwide quarterly paid-unit growth17.0%reported
Evidence for
- AWS's quarterly segment margin increased to 0.394, while advertising growth accelerated to 0.26 and consolidated operating income grew faster than sales.[Amazon Q2 2026 results]· primary
Evidence against
- North America and International produced margins of only about 0.079 and 0.041 in the latest quarter, and shipping costs grew 0.19.[Amazon Q2 2026 Form 10-Q]· primary
Tax rate20.0%medium
How derived: Starting from the 0.196 effective rate in 2025, this case assumes research credits and international income deductions broadly offset state and foreign additions, holding the long-run rate near 0.20.
Why this confidence: Assumption closely matches the latest full-year rate ↑, Geographic mix and tax-policy changes ↓
No tracked driver measures this assumption yet.
Evidence for
- Amazon's 2025 effective tax rate was 0.196 after research credits, foreign tax credits, and stock-based compensation benefits.[Amazon 2025 Form 10-K]· primary
Evidence against
- State and local taxes added 0.025 and foreign tax effects added 0.016 to Amazon's 2025 rate reconciliation, while tax-law changes reduced the foreign income deduction.[Amazon 2025 Form 10-K]· primary
Reinvestment rate65.0%low
How derived: Starting from the current AI-heavy capital program, this case assumes 0.65 of after-tax operating profit remains reinvested because high utilization, custom chips, and denser delivery networks generate more growth per dollar as the initial buildout matures.
Why this confidence: Strong current AWS incremental earnings ↑, Unproven long-run returns on unprecedented AI spending ↓
Measured by
- AWS quarterly operating margin39.4%reported
- Quarterly cash capital expenditure intensity26.5%derived
Evidence for
- AWS operating income grew 0.64 on sales growth of 0.37, consistent with strong operating leverage from deployed infrastructure.[Amazon Q2 2026 results]· primary
Evidence against
- Trailing free cash flow fell to a $7.6 billion outflow because property and equipment purchases increased by $66.1 billion, primarily for artificial intelligence.[Amazon Q2 2026 results]· primary
Terminal growth3.0%low
How derived: Starting from roughly 0.04 implied longer-run nominal economic growth, this case assumes Amazon retains enough cloud, advertising, logistics, and commerce advantages to grow 0.03 indefinitely while remaining below the wider economy.
Why this confidence: Rate remains below implied nominal economic growth ↑, Optimistic perpetual competitive-position assumption ↓
No tracked driver measures this assumption yet.
Evidence for
- The Federal Reserve's longer-run projections of 0.02 real growth and 0.02 inflation imply nominal economic growth above this assumption.[Federal Reserve June 2026 projections]· primary
Evidence against
- Amazon already generates hundreds of billions of dollars in annual sales and reports broad competition across each major business, making sustained share gains progressively harder.[Amazon 2025 Form 10-K]· primary
Valuation robustness
reliability of the estimate, not a stock rating52 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 75% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The bear-to-bull range spans 192% of the base value — the outcome is highly uncertain.→ scenarios
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 11.0% | 0.31 | -62.3% | 10.74B | 1.7% |
| Q1 2025 | 8.6% | -0.74 | -294.7% | 10.79B | 1.2% |
| Q2 2025 | 13.3% | 0.03 | -95.7% | 10.81B | 0.9% |
| Q3 2025 | 13.4% | 0.04 | -87.3% | 10.85B | 1.0% |
| Q1 2026 | 16.6% | -1.67 | -125.3% | 10.87B | 0.8% |
| Q2 2026 | 19.6% | -0.81 | -2733.3% | 10.9B | 0.9% |
Valuation history every run
Why intrinsic value changed
Why
AWS quarterly constant-currency growth moved from an unreported prior value to 37.0%, as reported in Amazon Q2 2026 supplemental metrics.
Measured by
- AWS quarterly constant-currency growth37.0%reported
- Advertising quarterly constant-currency growth26.0%reported
- Worldwide quarterly paid-unit growth17.0%reported
Why
AWS quarterly constant-currency growth moved from an unreported prior value to 37.0%, as reported in Amazon Q2 2026 supplemental metrics.
Measured by
- AWS quarterly constant-currency growth37.0%reported
- AWS quarterly operating margin39.4%reported
- Advertising quarterly constant-currency growth26.0%reported
- Quarterly cash capital expenditure intensity26.5%derived
- Worldwide quarterly paid-unit growth17.0%reported
Why
No sourced event is linked to this change yet — the researched assumption moved without a cited driver observation behind it.
Why
AWS quarterly operating margin moved from an unreported prior value to 39.4%, as reported in Amazon Q2 2026 supplemental metrics.
Measured by
- AWS quarterly operating margin39.4%reported
- Quarterly cash capital expenditure intensity26.5%derived
Sequential deterministic bridge · order-dependent contributions · exactly reconciled
Material event timeline
6/30/2026
AWS quarterly operating margin moved from an unreported prior value to 39.4%, as reported in Amazon Q2 2026 supplemental metrics.
Amazon Q2 2026 supplemental metrics ↗6/30/2026
AWS quarterly constant-currency growth moved from an unreported prior value to 37.0%, as reported in Amazon Q2 2026 supplemental metrics.
Amazon Q2 2026 supplemental metrics ↗Market inputs researched
The input uses the approximately 0.0475 ten-year U.S. Treasury yield available at the September 2026 valuation date.
The input uses the reported 1.24 market beta as an observable risk parameter rather than deriving it from earnings or valuation forecasts.
The input uses the September 1, 2026 trailing-twelve-month adjusted-payout implied U.S. equity risk premium.
The input uses Amazon's September 3, 2026 closing price, the latest completed close directly available in the cited historical-price record.
Generated 9/5/2026, 1:17:10 AM · pipeline v1.2.0