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Back of Napkin

Amazon.com, Inc. AMZN

Three-pass checkedFresh as companies report

Amazon reported $62.6B of net income last quarter and $50.5B of it was writing up its stake in Anthropic.

Meanwhile it did something none of its peers did: it shortened the assumed life of its servers from six years to five, which costs it $1.4B a year.

AMZN · price with moving averages

Daily · 6MWeekly · 3Y
$109$153$198$242$287 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Amazon is a retailer that owns a utility. The stores, marketplace and Prime subscriptions generate $158B a quarter across North America and International at thin margins. Amazon Web Services generates $42B at margins approaching 40% and produces most of the profit. Advertising sits on top of the retail traffic and is disclosed only partially.

The retail business funds and justifies the logistics network. AWS is the reason the company is worth what it is.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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