Amazon's recent aggressive push for supplier price cuts is a masterclass in margin protection and proactive risk management.
When President Trump’s sweeping global tariffs were first implemented (after his return to office in 2025), Amazon made concessions to its suppliers to prevent a massive spike in consumer prices.
- The Old Deal: Amazon agreed to pay suppliers higher wholesale prices to help them cover the cost of the new tariffs.
- The New Demand: Now that some of these tariffs have been partially reduced (following a late 2025 deal with China), Amazon wants those savings back. They are pushing to lower the prices they pay suppliers, arguing that the "emergency" costs have subsided.
By demanding reductions of up to 30% from vendors, Amazon is effectively unwinding the "tariff concessions" it granted during the 2025 trade volatility. This is a strategic maneuver to ensure that the retail segment’s profitability remains insulated from the unpredictable tides of international trade policy. As the company moves its annual negotiation deadlines forward, it is essentially locking in lower cost structures that will bolster the bottom line throughout the 2026 fiscal year.
The timing of this move is particularly savvy given the looming Supreme Court ruling on the legality of recent tariffs. The U.S. Supreme Court is currently deciding a landmark case (Learning Resources, Inc. v. Trump) regarding the legality of the International Emergency Economic Powers Act (IEEPA) used to impose these tariffs.
Amazon is positioning itself to win regardless of the judicial outcome. If the Court upholds the tariffs, Amazon has already secured the lower wholesale costs needed to keep consumer prices competitive without eroding its own margins. Conversely, if the Court strikes the tariffs down, Amazon stands at the front of the line to benefit from massive government refunds while having already established a lower baseline for its procurement costs. This "heads I win, tails I don't lose" strategy demonstrates the sheer leverage Amazon wields over its global supply chain.
Ultimately, this pivot signals that Amazon is prioritizing "retail discipline" to drive free cash flow in an era of high interest rates and geopolitical shifts. While these demands place significant pressure on smaller vendors, for the investor, it reinforces the strength of Amazon’s moat. The company is leveraging its massive scale to force efficiency back onto its partners, ensuring that even in a turbulent macro environment, the e-commerce engine remains a lean, high-output contributor to the broader Amazon ecosystem.
Amazon's latest earnings report has been met with significant excitement, particularly driven by the stellar performance of its cloud unit, Amazon Web Services (AWS). In the third quarter, AWS reported a 20% rise in revenue, a growth rate not seen in nearly three years, which comfortably surpassed analyst expectations. This massive demand, largely fueled by businesses relentlessly investing in artificial intelligence (AI) development.
Growth in Amazon's traditional e-commerce business is softer by comparison, but the critical holiday season is still ahead of us.
AWS is the high margin segment and its growth continues to lift aggregated group margins incrementally - which means a more valuable business on a net present value of future cash flow basis. The company's shares soared by 14% in after-market trading last night, and are expected to open strongly today.
The strong showing from AWS is vital because, despite accounting for just over 15% of Amazon's total revenue, the cloud division is a huge profit engine, responsible for approximately 60% of the company's total operating income. This strong momentum has prompted Amazon to project encouraging fourth-quarter net sales of between $206 billion and $213 billion, an outlook that is generally above Wall Street's consensus.
Furthermore, both CEO Andy Jassy and CFO Brian Olsavsky confirmed plans to significantly increase capital expenditures next year, continuing Big Tech's trend of pouring billions into AI-focused projects, including chips and data centers.
Amazon has, undeservedly, been a laggard and was the worst-performing stock among the "Magnificent 7" tech giants as too few in the market have recognized that it is in fact one of the most interesting plays in AI (see: https://rockandturner.substack.com/p/heavy-weight-ai-clash-amazon-vs-alphabet). The recent results may cause the market to wake up and re-rate the stock.
The Q3 results have confirmed that the company's fundamentals are robust, with its operations "firing on all cylinders." CEO Andy Jassy expressed an exuberant tone about the company's current trajectory, believing that momentum in areas like AWS, advertising and retail sales can sustain growth for the foreseeable future. The company’s advertising arm also provided a bright spot, with sales increasing by 24% year-over-year.
The results align with other major cloud providers like Microsoft Azure and Google Cloud, all of whom reported strong cloud revenue as the AI spending splurge holds up across the tech industry. Jassy's comments echo those of his rivals, indicating no slowdown in Big Tech's AI investment, which Federal Reserve Chair Jerome Powell recently noted is a major source of economic growth. While celebrating its financial success, Amazon also addressed its recent workforce changes, clarifying that its significant corporate job cuts were a "culture" initiative aimed at streamlining operations and removing layers of management, rather than a financially or AI-driven decision. Either way, stronger revenues combined with reduced labour costs can only mean one thing - improved margins and profitability in the years ahead.
AMAZON TO CUT FULFILLMENT COSTS, SAVING UPTO $4bn ANNUALLY
Morgan Stanley analyst Brian Nowak estimates that Amazon’s deployment of next-generation robotics warehouses could generate $2 billion to $4 billion in annual recurring fulfillment and warehouse efficiencies by 2027. These savings stem from a 20%–40% improvement in fulfillment costs, with the most advanced facilities like the Shreveport, Louisiana site already achieving around a 25% reduction in costs. The firm notes that roughly 40 such robotic warehouses, handling about 10% of Amazon’s global units, could drive these efficiencies.
Amazon’s robotics division reportedly aims to automate 75% of its U.S. operations by 2033, enabling the company to double its product sales without proportional workforce growth. By 2027, the company expects to avoid hiring over 160,000 U.S. warehouse employees, translating to a cost reduction of approximately $0.30 per item shipped. While some projections suggest total savings could reach $10 billion
Reports indicate the company aims to 'avoid' hiring more than 600,000 U.S. workers by 2033 through automation, although Amazon has publicly stated that leaked documents reflecting these plans present an incomplete view and do not represent its overall hiring strategy.
Beware: sensationalist journalists are mis-reporting this story and claiming that Amazon's automation drive will result in 600,000 'job cuts' - which is entirely misleading.
After nearly twenty years at the helm, Spotify founder Daniel Ek is stepping aside as CEO to become executive chairman. Day-to-day leadership now falls to co-CEOs Gustav Söderström and Alex Norström, who have already been running much of the operation in practice. What stands out from an Amazon investor’s perspective is the unexpected partnership between Spotify and Amazon Ads. Despite being rivals in music streaming, Spotify has opened the door for Amazon’s DSP advertisers to tap into its 700 million monthly users. That’s a meaningful boost to Amazon’s growing advertising business, reinforcing how its ad platform is extending well beyond retail into broader digital ecosystems.
2. European Sovereign Cloud
As governments tighten security around public cloud platforms increasingly infused with large language models, the EU is pushing hard on sovereign cloud to ensure technological resilience and independence. The European Commission has launched a new cloud and AI initiative to complement its five-point plan to triple data center capacity and close the region’s infrastructure gap, with sovereignty and competitiveness as central goals. Cloud providers are moving quickly in response: AWS recently deepened its partnership with SAP, enabling the German ERP leader’s sovereign cloud capabilities on AWS’s EU public cloud, while SAP committed over $23 billion to expanding European data center capacity.
AWS has named Stéphane Israël, former Boston Consulting Group partner, as managing director of its newly forming European Sovereign Cloud unit, which is slated to launch by year-end. He’ll join Kathrin Renz, already playing a dual leadership role, as joint managing directors. This move bolsters Amazon’s strategy to address rising EU demands for data sovereignty: AWS has committed €7.8 billion through 2040, is creating an EU-based parent entity plus a dedicated security operations center, and promises that data, operations and support in the region will remain under EU jurisdiction and staffing.
AWS teamed up with SAP to offer cloud services in Europe that keep government data local. The German launch targets clients who need strict data controls.
AWS Pushes Trainium as a Cost-Effective Alternative to Nvidia GPUs
Amazon Web Services (AWS) is actively encouraging its customers to adopt its in-house Trainium chips over Nvidia’s GPUs, positioning them as a more affordable alternative. According to AWS, Trainium offers comparable performance while reducing costs by 25%.
This push coincided with Nvidia’s GTC 2025 event, where the company was showcasing its latest hardware. Trainium is part of Amazon’s broader silicon strategy, alongside Graviton and Inferentia, designed to support machine learning workloads in the AWS cloud. While Trainium isn’t a direct replacement for Nvidia’s high-end GPUs, it doesn’t have to be—it offers a viable, lower-cost solution for many AI training needs.
AWS’s move reflects a wider industry trend, with cloud providers like Amazon and Google developing their own custom chips to mitigate the high costs and limited availability of Nvidia GPUs.
The key advantage AWS offers is accessibility. By promoting Trainium, the company enables customers to experiment with AI training and inference workloads without long wait times or premium pricing for Nvidia’s in-demand GPUs.
Enterprises used to working with Nvidia’s compute unified device architecture (CUDA) need to think about the cost of switching to a whole new platform like Trainium, but once the switching cost issue has been overcome - and the discounted chip price ought to help make that happen - one needs to ask, "Is Amazon about to disrupt another industry?"
Amazon is shaking up the car market once again, expanding its Amazon Autos platform to include used cars across 68 markets. This bold move is designed to help dealers clear out inventory while making the car-buying process smoother for customers. But it’s also a direct challenge to traditional auto retailers, potentially accelerating the disruption of the industry—especially as used car prices continue to drop.
Originally, Amazon Autos launched with new Hyundai models, allowing customers to browse, finance, and schedule pick-ups directly with local dealers. Now, by adding used cars to the mix, Amazon is doubling down on its mission to simplify car shopping.
The timing couldn’t be more strategic. The used car market has been struggling with price declines due to cyclical challenges, forcing many traditional dealerships to cut back on spending. But while others scale down, Amazon is scaling up - Capital Cycle Theory in action!
Amazon has a history of disrupting industries, and this latest expansion could reshape how people buy cars. As always, the e-commerce giant seems to have perfect timing.
Amazon has secured its first known UK military contract through its satellite venture, Project Kuiper, which won a £670,000 deal with the Ministry of Defence (MoD) and UK Space Command. It will undertake a study on advanced space-based communications systems. The consultancy deal involves Kuiper exploring the use of “translator” satellites for British military purposes.
Kuiper’s research will focus on “translator” satellites, which aim to improve communications between military, government, and private networks, an area also being explored by the US Defence Advanced Research Projects Agency (DARPA).
This move aligns with Western governments' efforts to find alternatives to Musk’s Starlink, as geopolitical concerns over his business ties gain attention. Amazon has already established itself as a key UK government supplier through its Amazon Web Services (AWS) division, and it recently received approval from Ofcom (The Office of Communications - the regulatory and competition authority for the broadcasting, telecommunications and postal industries of the United Kingdom) to provide satellite-based broadband in Britain.
Amazon has been actively engaging with defence officials worldwide seeking additional contracts for its growing satellite business.
The UK is advancing its military satellite programs, including the £5bn GBP Skynet-6 project, while also exploring intelligence-gathering satellite networks. The EU is funding its own sovereign satellite constellation, Iris2, and Taiwan has already engaged with Amazon over Kuiper amid concerns about Elon Musk's Chinese allegiance (China is a huge market for Tesla, so there is a conflict of interest that concerns Taiwan).
These developments reflect growing interest in securing independent and diversified space-based communication networks, all of which is great news for Amazon's project Kuiper.
Very good article, thanks for sharing. I share your view about AMZN being the best option of the mag 7, but also hold a smaller position in GOOG.
You do have a few typos in the valuation part - the values should be $170 (not $1.70), $392 (not $3.92), etc. I assume this may have something to do with UK companies being denominated in pence :)
Having read my analysis of Amazon, and my humble opinion that it is a better choice than Alphabet or Apple, you suggest that you are rethinking your Apple and Alphabet positions.
To clarify, I am not suggesting that Apple and Alphabet shares won't continue to rise. However, the market is currently broken (see: https://rockandturner.substack.com/p/is-the-stock-market-broken) which means share prices often deviate significantly from intrinsic value. For instance, Apple's sales and earnings declined in 2023 and, as of 2024, remained below 2022 levels. Yet, during this same two-year period, its share price doubled. Is this sustainable? In a broken market, who can say?
The core issue lies in the distinction between investing and speculation. Intelligent investing is an academic game of skill and wit, while speculation is a game of chance. I identify as an investor, not a speculator. My point in this article is that, in my view, Amazon represents an intelligent investment for the reasons I’ve outlined. Conversely, I currently see Apple and Alphabet as far more speculative.
Please note that my writing is for informational purposes only. It’s intended to encourage constructive thinking, not to guide your investment decisions directly.
Consider this analogy: betting on red at a casino roulette table gives you less than a 50/50 chance of winning because of the green spaces, yet the payout is only even money. It's a bad bet. Fundamentally, my advice against taking such a bet would be sound. But if you were to bet on red anyway and win, doubling your money, does that make my reasoning flawed? Does it mean your decision was correct?
I trust you understand the point I’m making. Whatever choices you make, I hope your investment decisions work out well for you.
Amazon (AMZN) officially overtook Walmart as the largest American company by revenue, posting $716.9 billion versus Walmart's (WMT) $713.2 billion.
Amazon's recent aggressive push for supplier price cuts is a masterclass in margin protection and proactive risk management.
When President Trump’s sweeping global tariffs were first implemented (after his return to office in 2025), Amazon made concessions to its suppliers to prevent a massive spike in consumer prices.
- The Old Deal: Amazon agreed to pay suppliers higher wholesale prices to help them cover the cost of the new tariffs.
- The New Demand: Now that some of these tariffs have been partially reduced (following a late 2025 deal with China), Amazon wants those savings back. They are pushing to lower the prices they pay suppliers, arguing that the "emergency" costs have subsided.
By demanding reductions of up to 30% from vendors, Amazon is effectively unwinding the "tariff concessions" it granted during the 2025 trade volatility. This is a strategic maneuver to ensure that the retail segment’s profitability remains insulated from the unpredictable tides of international trade policy. As the company moves its annual negotiation deadlines forward, it is essentially locking in lower cost structures that will bolster the bottom line throughout the 2026 fiscal year.
The timing of this move is particularly savvy given the looming Supreme Court ruling on the legality of recent tariffs. The U.S. Supreme Court is currently deciding a landmark case (Learning Resources, Inc. v. Trump) regarding the legality of the International Emergency Economic Powers Act (IEEPA) used to impose these tariffs.
Amazon is positioning itself to win regardless of the judicial outcome. If the Court upholds the tariffs, Amazon has already secured the lower wholesale costs needed to keep consumer prices competitive without eroding its own margins. Conversely, if the Court strikes the tariffs down, Amazon stands at the front of the line to benefit from massive government refunds while having already established a lower baseline for its procurement costs. This "heads I win, tails I don't lose" strategy demonstrates the sheer leverage Amazon wields over its global supply chain.
Ultimately, this pivot signals that Amazon is prioritizing "retail discipline" to drive free cash flow in an era of high interest rates and geopolitical shifts. While these demands place significant pressure on smaller vendors, for the investor, it reinforces the strength of Amazon’s moat. The company is leveraging its massive scale to force efficiency back onto its partners, ensuring that even in a turbulent macro environment, the e-commerce engine remains a lean, high-output contributor to the broader Amazon ecosystem.
Amazon's latest earnings report has been met with significant excitement, particularly driven by the stellar performance of its cloud unit, Amazon Web Services (AWS). In the third quarter, AWS reported a 20% rise in revenue, a growth rate not seen in nearly three years, which comfortably surpassed analyst expectations. This massive demand, largely fueled by businesses relentlessly investing in artificial intelligence (AI) development.
Growth in Amazon's traditional e-commerce business is softer by comparison, but the critical holiday season is still ahead of us.
AWS is the high margin segment and its growth continues to lift aggregated group margins incrementally - which means a more valuable business on a net present value of future cash flow basis. The company's shares soared by 14% in after-market trading last night, and are expected to open strongly today.
The strong showing from AWS is vital because, despite accounting for just over 15% of Amazon's total revenue, the cloud division is a huge profit engine, responsible for approximately 60% of the company's total operating income. This strong momentum has prompted Amazon to project encouraging fourth-quarter net sales of between $206 billion and $213 billion, an outlook that is generally above Wall Street's consensus.
Furthermore, both CEO Andy Jassy and CFO Brian Olsavsky confirmed plans to significantly increase capital expenditures next year, continuing Big Tech's trend of pouring billions into AI-focused projects, including chips and data centers.
Amazon has, undeservedly, been a laggard and was the worst-performing stock among the "Magnificent 7" tech giants as too few in the market have recognized that it is in fact one of the most interesting plays in AI (see: https://rockandturner.substack.com/p/heavy-weight-ai-clash-amazon-vs-alphabet). The recent results may cause the market to wake up and re-rate the stock.
The Q3 results have confirmed that the company's fundamentals are robust, with its operations "firing on all cylinders." CEO Andy Jassy expressed an exuberant tone about the company's current trajectory, believing that momentum in areas like AWS, advertising and retail sales can sustain growth for the foreseeable future. The company’s advertising arm also provided a bright spot, with sales increasing by 24% year-over-year.
The results align with other major cloud providers like Microsoft Azure and Google Cloud, all of whom reported strong cloud revenue as the AI spending splurge holds up across the tech industry. Jassy's comments echo those of his rivals, indicating no slowdown in Big Tech's AI investment, which Federal Reserve Chair Jerome Powell recently noted is a major source of economic growth. While celebrating its financial success, Amazon also addressed its recent workforce changes, clarifying that its significant corporate job cuts were a "culture" initiative aimed at streamlining operations and removing layers of management, rather than a financially or AI-driven decision. Either way, stronger revenues combined with reduced labour costs can only mean one thing - improved margins and profitability in the years ahead.
AMAZON TO CUT FULFILLMENT COSTS, SAVING UPTO $4bn ANNUALLY
Morgan Stanley analyst Brian Nowak estimates that Amazon’s deployment of next-generation robotics warehouses could generate $2 billion to $4 billion in annual recurring fulfillment and warehouse efficiencies by 2027. These savings stem from a 20%–40% improvement in fulfillment costs, with the most advanced facilities like the Shreveport, Louisiana site already achieving around a 25% reduction in costs. The firm notes that roughly 40 such robotic warehouses, handling about 10% of Amazon’s global units, could drive these efficiencies.
Amazon’s robotics division reportedly aims to automate 75% of its U.S. operations by 2033, enabling the company to double its product sales without proportional workforce growth. By 2027, the company expects to avoid hiring over 160,000 U.S. warehouse employees, translating to a cost reduction of approximately $0.30 per item shipped. While some projections suggest total savings could reach $10 billion
Reports indicate the company aims to 'avoid' hiring more than 600,000 U.S. workers by 2033 through automation, although Amazon has publicly stated that leaked documents reflecting these plans present an incomplete view and do not represent its overall hiring strategy.
Beware: sensationalist journalists are mis-reporting this story and claiming that Amazon's automation drive will result in 600,000 'job cuts' - which is entirely misleading.
AMAZON KEEPS WINNING
1. The Spotify connection
After nearly twenty years at the helm, Spotify founder Daniel Ek is stepping aside as CEO to become executive chairman. Day-to-day leadership now falls to co-CEOs Gustav Söderström and Alex Norström, who have already been running much of the operation in practice. What stands out from an Amazon investor’s perspective is the unexpected partnership between Spotify and Amazon Ads. Despite being rivals in music streaming, Spotify has opened the door for Amazon’s DSP advertisers to tap into its 700 million monthly users. That’s a meaningful boost to Amazon’s growing advertising business, reinforcing how its ad platform is extending well beyond retail into broader digital ecosystems.
2. European Sovereign Cloud
As governments tighten security around public cloud platforms increasingly infused with large language models, the EU is pushing hard on sovereign cloud to ensure technological resilience and independence. The European Commission has launched a new cloud and AI initiative to complement its five-point plan to triple data center capacity and close the region’s infrastructure gap, with sovereignty and competitiveness as central goals. Cloud providers are moving quickly in response: AWS recently deepened its partnership with SAP, enabling the German ERP leader’s sovereign cloud capabilities on AWS’s EU public cloud, while SAP committed over $23 billion to expanding European data center capacity.
AWS has named Stéphane Israël, former Boston Consulting Group partner, as managing director of its newly forming European Sovereign Cloud unit, which is slated to launch by year-end. He’ll join Kathrin Renz, already playing a dual leadership role, as joint managing directors. This move bolsters Amazon’s strategy to address rising EU demands for data sovereignty: AWS has committed €7.8 billion through 2040, is creating an EU-based parent entity plus a dedicated security operations center, and promises that data, operations and support in the region will remain under EU jurisdiction and staffing.
AWS teamed up with SAP to offer cloud services in Europe that keep government data local. The German launch targets clients who need strict data controls.
April 10, 2025 - Annual Shareholder Letter
I commend everyone to read this letter from Andy Jassy, Amazon CEO. It says everything you need to know about Amazon, its culture and its future.
https://www.aboutamazon.com/news/company-news/amazon-ceo-andy-jassy-2024-letter-to-shareholders?utm_source=substack&utm_medium=email
AWS Pushes Trainium as a Cost-Effective Alternative to Nvidia GPUs
Amazon Web Services (AWS) is actively encouraging its customers to adopt its in-house Trainium chips over Nvidia’s GPUs, positioning them as a more affordable alternative. According to AWS, Trainium offers comparable performance while reducing costs by 25%.
This push coincided with Nvidia’s GTC 2025 event, where the company was showcasing its latest hardware. Trainium is part of Amazon’s broader silicon strategy, alongside Graviton and Inferentia, designed to support machine learning workloads in the AWS cloud. While Trainium isn’t a direct replacement for Nvidia’s high-end GPUs, it doesn’t have to be—it offers a viable, lower-cost solution for many AI training needs.
AWS’s move reflects a wider industry trend, with cloud providers like Amazon and Google developing their own custom chips to mitigate the high costs and limited availability of Nvidia GPUs.
The key advantage AWS offers is accessibility. By promoting Trainium, the company enables customers to experiment with AI training and inference workloads without long wait times or premium pricing for Nvidia’s in-demand GPUs.
Enterprises used to working with Nvidia’s compute unified device architecture (CUDA) need to think about the cost of switching to a whole new platform like Trainium, but once the switching cost issue has been overcome - and the discounted chip price ought to help make that happen - one needs to ask, "Is Amazon about to disrupt another industry?"
I wouldn't bet against them.
CAPITAL CYCLE THEORY IN ACTION
Amazon is shaking up the car market once again, expanding its Amazon Autos platform to include used cars across 68 markets. This bold move is designed to help dealers clear out inventory while making the car-buying process smoother for customers. But it’s also a direct challenge to traditional auto retailers, potentially accelerating the disruption of the industry—especially as used car prices continue to drop.
Originally, Amazon Autos launched with new Hyundai models, allowing customers to browse, finance, and schedule pick-ups directly with local dealers. Now, by adding used cars to the mix, Amazon is doubling down on its mission to simplify car shopping.
The timing couldn’t be more strategic. The used car market has been struggling with price declines due to cyclical challenges, forcing many traditional dealerships to cut back on spending. But while others scale down, Amazon is scaling up - Capital Cycle Theory in action!
Amazon has a history of disrupting industries, and this latest expansion could reshape how people buy cars. As always, the e-commerce giant seems to have perfect timing.
AMAZON BREAKING NEWS
Amazon has secured its first known UK military contract through its satellite venture, Project Kuiper, which won a £670,000 deal with the Ministry of Defence (MoD) and UK Space Command. It will undertake a study on advanced space-based communications systems. The consultancy deal involves Kuiper exploring the use of “translator” satellites for British military purposes.
Kuiper’s research will focus on “translator” satellites, which aim to improve communications between military, government, and private networks, an area also being explored by the US Defence Advanced Research Projects Agency (DARPA).
This move aligns with Western governments' efforts to find alternatives to Musk’s Starlink, as geopolitical concerns over his business ties gain attention. Amazon has already established itself as a key UK government supplier through its Amazon Web Services (AWS) division, and it recently received approval from Ofcom (The Office of Communications - the regulatory and competition authority for the broadcasting, telecommunications and postal industries of the United Kingdom) to provide satellite-based broadband in Britain.
Amazon has been actively engaging with defence officials worldwide seeking additional contracts for its growing satellite business.
The UK is advancing its military satellite programs, including the £5bn GBP Skynet-6 project, while also exploring intelligence-gathering satellite networks. The EU is funding its own sovereign satellite constellation, Iris2, and Taiwan has already engaged with Amazon over Kuiper amid concerns about Elon Musk's Chinese allegiance (China is a huge market for Tesla, so there is a conflict of interest that concerns Taiwan).
These developments reflect growing interest in securing independent and diversified space-based communication networks, all of which is great news for Amazon's project Kuiper.
Very good article, thanks for sharing. I share your view about AMZN being the best option of the mag 7, but also hold a smaller position in GOOG.
You do have a few typos in the valuation part - the values should be $170 (not $1.70), $392 (not $3.92), etc. I assume this may have something to do with UK companies being denominated in pence :)
Thank you for pointing out the formatting of the money values. It has been corrected now.
Thanks for the report, makes me think about my existing Apple and Alphabet position :-/
Having read my analysis of Amazon, and my humble opinion that it is a better choice than Alphabet or Apple, you suggest that you are rethinking your Apple and Alphabet positions.
To clarify, I am not suggesting that Apple and Alphabet shares won't continue to rise. However, the market is currently broken (see: https://rockandturner.substack.com/p/is-the-stock-market-broken) which means share prices often deviate significantly from intrinsic value. For instance, Apple's sales and earnings declined in 2023 and, as of 2024, remained below 2022 levels. Yet, during this same two-year period, its share price doubled. Is this sustainable? In a broken market, who can say?
The core issue lies in the distinction between investing and speculation. Intelligent investing is an academic game of skill and wit, while speculation is a game of chance. I identify as an investor, not a speculator. My point in this article is that, in my view, Amazon represents an intelligent investment for the reasons I’ve outlined. Conversely, I currently see Apple and Alphabet as far more speculative.
Please note that my writing is for informational purposes only. It’s intended to encourage constructive thinking, not to guide your investment decisions directly.
Consider this analogy: betting on red at a casino roulette table gives you less than a 50/50 chance of winning because of the green spaces, yet the payout is only even money. It's a bad bet. Fundamentally, my advice against taking such a bet would be sound. But if you were to bet on red anyway and win, doubling your money, does that make my reasoning flawed? Does it mean your decision was correct?
I trust you understand the point I’m making. Whatever choices you make, I hope your investment decisions work out well for you.