Amazon's operating thesis is strong, but the stock price already discounts substantial execution; valuation on price-to-operating-cash-flow looks cheap but may not be as cheap as it seems due to capex sensitivity of free cash flow.

Amazon is my largest investment, and right now, on a price-to-operating-cash-flow basis, it looks cheap, but it may not be as cheap as I think

Amazon's operating thesis remains strong, but the stock price already discounts substantial execution. Growth in AWS, advertising, and AI-related growth. These are the things that I'm a big fan of myself.

The balance sheet is robust, while free cash flow is more sensitive to capital expenditures than the headline operating cash flow suggests. So, that right there makes me think instead of just looking at it on a price to operating cash flow basis, I need to now start thinking about free cash flow with Amazon because of their big investment cycle. So, that right there is interesting to me.

It again goes through competitive advantage. It gives you a full rundown of the stock, the balance sheet, management quality, valuation versus growth prospects, and more. I wanted to learn how Amazon is competing with Nvidia.

And are they competing with Nvidia? And again, gives me a nice long answer to dive into, but the summary is that yes, but Amazon is competing with Nvidia in selected parts of the AI infrastructure stack, not replacing Nvidia across the entire business.

Where Amazon competes with Nvidia. First, in custom AI chips. That's their Trainium chips and their Inferentia chips. And then in cloud platform competition.

So, anyways, wanted to share this on Amazon. I'm going to provide more coverage, so make sure you follow if you're interested in Amazon