Shares of Amazon are hitting all-time highs in the pre-market after AWS growth exceeded 20% for the first time since 2022. This has alleviated concerns that the company was losing market share in AI and the cloud, despite years of massive spending.
It was a defining quarter for CEO Andy Jassey, who succeeded Jeff Bezos in July 2021. Jassey made his bones building AWS. The perceived underperformance in the Cloud and of AMZN shares during his reign had become a growing concern, at least until last night.
With everyone back on the Amazon bandwagon, shares suddenly look stunningly undervalued compared to the rest of the Mag7. It went almost unnoticed that retail is the engine funding all initiatives in the cloud, AI, space, shipping, and broadcasting for Amazon. It always has been.
Profit Indifference as a Feature, not a Bug
Amazon is the best retailer on earth and better at allocating capital than any American company since the heyday of Berkshire Hathaway. Berkshire generates about half its cash from insurance float. Over several decades, Warren Buffett and Charlie Munger used this cash to invest in a vast array of companies. Most of these, Berkshire didn’t manage directly, except as investments.
Amazon began as an unprofitable online bookstore. Its famed 1997 prospectus made clear it would ignore near-term profits to reinvest in top opportunities.
The quarter before going public, Amazon lost about $3 million on sales of $16 million. In Q3 2025, Amazon generated $67 billion in online sales, $42 billion in fulfilling orders for third-party merchants, and $5.6 billion in sales from brick-and-mortar stores. In total, retail sales generated about $100 billion in revenue and $5 billion in profits.
AWS produced $33 billion in revenue and $11 billion in profit. The market’s response has added over $250 billion to Amazon investors’ wealth.
Amazon is the Everything Company by design. As Jassey put it, Amazon aims to be the world’s largest start-up, pursuing opportunities wherever they arise. They’ve done this for 30 years. They’re not slowing down — if anything, they’re picking up steam.
Amazon is now the world’s top retailer almost incidentally. The sheer ambition of Bezos’ vision seems normal now, but 30 years ago, before Amazon went public, few would have funded such an intentionally profitless venture.
I’ll share updates on Amazon, Chipotle, earnings, and more in my Members Only Video later today. I do not plan to discuss selling Amazon shares.
