Independent Insight Provider

Hao Wang, CFA

Equity Bottom-Up

<p>Amazon stock is expensive, but we need to understand why investors give it such valuations. The company's core retail business is rapidly growing revenue, but will always produce thin margins. The key is Amazon Web Services (AWS) which was disclosed as a separate segment this year. This short note is not to model the company in granularity but provides some details into understanding the potential in AWS business and where are we stand now. The next question we need to ask will Amazon be able to grow to realize this potential into its valuation.</p>

Amazon stock is expensive, but we need to understand why investors give it such valuations. The company's core retail business is rapidly growing revenue, but will always produce thin margins. The key is Amazon Web Services (AWS) which was disclosed as a separate segment this year. This short note is not to model the company in granularity but provides some details into understanding the potential in AWS business and where are we stand now. The next question we need to ask will Amazon be able to grow to realize this potential into its valuation.

Thoughts on Amazon –What Does Its Valuation Tells Us?

Amazon.com Inc

Thoughts on Amazon –What Does Its Valuation Tells Us?