steven fiorillo
Amazon 10
10/25/2025, 11:55:09 PM
Economic Summary
- Amazon (AMZN) reported Q2 revenue of $167.7B and operating income of $19.17B, a 30.66% year-over-year increase, with North America sales up ~11.15% and International sales up ~16%.
- AWS posted net sales of $30.87B (+17.5% YoY) and operating income of $10.16B (+8.85% YoY) but experienced margin compression from 35.5% to 32.91%; AWS still accounts for roughly 53% of Amazon's operating margin.
- Amazon's cost base is very large (SG&A ~ $160B, R&D ~ $95B, total operating expenses cited near $256B), creating room for automation-driven savings; the speaker estimates automation could free $10–50B of additional operating income over several years.
- Analyst estimates suggest a path to $1T in revenue by 2029 for AMZN; if operating margin could be pushed toward 20% over multiple years, it would meaningfully increase long-term valuation and operating income.
Bullish
- Automation and robotics could materially cut labor costs and boost operating income.
- North America and International segments showed solid revenue and operating income improvements.
- Analysts project AMZN could reach $1 trillion revenue by 2029, implying large long-term upside if margins expand.
Bearish
- AWS margins compressed from 35.5% to 32.91%, signaling margin pressure at Amazon (AMZN).
- Very high operating expenses (SG&A ~160B, R&D ~95B, total op expenses ~256B) limit near-term margin expansion.
- Large-scale automation risks social/political backlash and potential transitional costs from replacing up to 600,000 jobs.
Bullish tickers
AMZN
Bearish tickers
AMZN
AMZN
Bullish
Huge automation and logistics scale could materially reduce costs, lift operating margins, and support long-term revenue and valuation upside.
Bearish
AWS margin compression, very large operating expenses, and social/political risk from large-scale automation and job losses.
MSFT
Bullish
Mentioned among Big Tech reporters this week; no specific bullish thesis provided in the transcript.
Bearish
Mentioned only as an upcoming report; no specific bearish thesis provided.
GOOGL
Bullish
Listed among major reporters; no specific bullish points discussed in the transcript.
Bearish
Mentioned (Alphabet) as part of Big Tech earnings cadence; no specific bearish points discussed.
META
Bullish
Included in the Big Tech line-up to report; no specific bullish analysis provided.
Bearish
Mentioned as an upcoming reporter; no detailed bearish analysis in the transcript.
AAPL
Bullish
Only mentioned as an upcoming earner; transcript focuses on AMZN not AAPL specifics.
Bearish
Mentioned as part of the reporting week; no company-specific bearish commentary given.
NVDA
Bullish
Referenced to compare operating income scale versus Amazon; no explicit bullish endorsement.
Bearish
Used only for an operating-income comparison; no direct bearish thesis in the transcript.
People mentioned
Andy JassyZach