Risk to Reward for AMZN is Better Than all Other Mag-7 Plays

MMMTWealth
09:35

Risk to reward for $Amazon.com(AMZN)$ is better than all other Mag-7 plays.

-> AWS is growing 40% YoY and will likely sustain that for the next 2-3 years.

-> Can almost value ~80% of the company on AWS alone.

Where AWS is today:

- $184B revenue run rate.

- 39% operating margins

- $578B backlog

- Management guiding to 40%+ growth in both 2027 and 2028.

Where AWS gets to:

- 40% growth -> $246B in 2027

- 40% growth again -> $345B in 2028

- At 38% margins -> $131B in operating income from AWS alone.

At 15x operating income we have a $2T company which is 77% of today's entire valuation.

Which means you're valuing retail, ads, Amazon Leo, Zoox, Trainium chips, Anthropic stake and everything else at $600M.

Risk to reward in the favour of bulls.

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