Amazon is currently the most bought stock by retail, so I spent some time digging through the recent financials to see what's actually going on beneath the surface.
The Profitability Story Is Actually Strong
Net income jumped from $59.2 billion to $77.7 billion, which is a 31% increase year over year. Operating margins hit around 12% and net margins near 10% by late 2025. These aren't numbers you'd typically associate with a company whose stock dropped 13% over the past few months. The business itself is generating more profit than ever.
The Cash Flow Situation Is More Complicated
Here's where it gets interesting. Operating cash flow grew to $139.5 billion, but capital expenditures ballooned to $131.8 billion. That's a massive spending increase that's eating into free cash generation. Long term debt also ticked up to $65.6 billion from $52.6 billion. The company is clearly betting big on something (likely AI infrastructure), but investors seem skeptical about the payoff timeline.
The Market Is Pricing In Execution Risk, Not Business Decline
The stock went from around $235 to $204 despite strong earnings growth. This disconnect suggests the market isn't worried about Amazon's core business. It's worried about whether all this capital spending will actually translate into returns. AWS still holds roughly 30% of global cloud infrastructure, but Azure and Google Cloud have been gaining ground.
The financial data and analysis were from \[Finbase\](https://thefinbase.com) and I also used \[TradingView\](https://www.tradingview.com/chart/3mprlymO/?symbol=NASDAQ%3AMZN) for its ability to view charts to get a broader understanding of Amazon’s price movements.
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