亚马逊是一家优质企业，但按当前价格未能达到说话者15%的回报要求；他只在230或以下才会买入。

If you own Amazon, some of the smartest investors on the planet are loading up on this stock while the insiders who run the company are cashing out billions. The stock just hit an all-time high, pulled back, and now it's sitting in what investors are calling no man's land.

So, who's right? The billionaires buying or the executive selling? Today, we're going to have three bull cases and three bare cases, and then we're going to run the numbers ourselves and find out what Amazon is really worth.

In late July, Amazon dropped from around 250 to about 225. That's a drop of 10%.

The market got nervous. There was broad anxiety across big tech about how much money that these companies are spending on AI and whether any of it was going to pay off fast enough. Amazon got caught in that wave and the stock sold off really hard.

And then Amazon announced earnings and the numbers were strong. The company beat on topline revenue and bottomline profit. And just like that, the stock ripped all the way to an all-time high of $284 on August 3rd.

But it didn't hold there. Over the next couple of weeks, the stock cooled off and settled into the mid260s. Alongside those strong earnings, management raised their spending outlook and investors started doing the math on how much of this profit is about to get plowed right back into infrastructure.

On top of that, Amazon announced plans to expand Prime Air drone delivery to nearly 500 US cities.

A reminder that this company never stops innovating and never stops investing. There are three big reasons the bulls believe Amazon at these prices still has a ton of room to run.

Bull case number one, AWS, Amazon Web Services is reacelerating and the AI revenue is now real money. In the most recent quarter, AWS revenue grew 37% year-over-year to 42.2 2 billion. That is the fastest growth rate in 18 quarters. 4 and a half years.

The biggest cloud platform in the world just hit its fastest growth in 4 and a half years.

And the AI piece of it is no longer a rounding error. Generative AI services within AWS have crossed a $25 billion annual revenue run rate. That is not a promise, guys. That is cash coming in the door.

Morgan Stanley put out a report outlining a scenario where Amazon could hit $500 a share by the end of 2027 if AWS keeps scaling like this.

Part of a long-term vision where the company approaches $1 trillion in total annualized revenue over the next decade. The bulls say that the cloud business alone is worth a massive chunk of Amazon's market cap.

Guys, can you imagine a world in which someday Amazon would split off AWS and their retail business into just two separate businesses? I don't think that's something to be scoffed at, especially if both are dominant and they're not given the maximum value they could have.

Now guys, that's not what analysts are saying. I just projected that from my own thoughts. Bull case number two, Amazon has quietly built one of the biggest chip businesses in the world and barely anyone has noticed.

So, while Nvidia gets all the headlines, Amazon has been doing something really smart behind the scenes. Instead of paying premium prices for everybody else's chips, they've built their own. They're called Trrenium and Inferentia, custom AI chips designed inhouse specifically for Amazon's workloads.

And this isn't some tiny side project. Amazon's custom silicon business has quietly crossed a $20 billion annualized run rate with tripledigit growth. Here's why that matters. When you're spending over $200 billion on infrastructure, building your own chips means you can do it significantly cheaper than the competition.

Companies like Microsoft and Google still rely heavily on outside chip makers to expand their business. As time goes on, Amazon is doing more and more of it in-house, saving money, and growing much more effectively.

That means lower costs per data center, better margins on cloud services, and an advantage that gets bigger the more they build. The bulls say this is the hidden story inside Amazon that most investors are completely missing.

Bull case number three, Amazon is becoming a much more profitable company and the stock is cheaper than you think. This is the one that surprises people because Amazon has always had a reputation for thin margins, but that is changing very quickly and I'll show you more on that later.

The low margin retail business is no longer the main driver of Amazon's value. In addition, that retail business is becoming much more profitable. AWS generated 60% of total operating profit in the most recent quarter.

The advertising business, which I consider part of the retail business, which most people forget about, grew 26% to 19.8 billion. These are high margin recurring revenue streams that completely change Amazon's earnings power.

And here's the math the bulls love. After the earnings beat, analysts raised their earnings estimates for next year by over 47%.

That means Amazon is trading at a forward PE of roughly 21 to 23 times earnings, which is very modest for a company that's growing operating income by over 40%. The bulls say the market still thinks of Amazon as a low margin retailer, but the numbers say otherwise.

So that's the bull case. If all that's true, then Amazon sitting at 262 might be a serious opportunity. But remember on our channel, we don't just look at the price of the stock. We need to understand more about the business.

So before we get into the bare cases, I want to show you something because when you see what the biggest investors on the planet just did with the stock, it tells you a lot.

The latest 13F filings just dropped. Those are the regulatory filings that show you exactly what the big money is buying and selling. And with Amazon, the moves are very loud. Stanley Duncan Miller, one of the greatest traders of all time, did a complete 180. Earlier this year, he cut his Amazon position by 71%. People thought he was done. Then in the second quarter, he came right back and bought aggressively, growing from 46,000 shares of Amazon all the way up to 542,000 shares.

Guys, that's not tiptoeing back in. That's a man who changed his mind and changed it aggressively, increasing his position size by 11x. David Ter, the guy who runs Apple, expanded his bet to 5 million shares worth $1.2 billion. Amazon is his single largest holding. His biggest position that tells you where his conviction is.

Seth Clarin, if you don't know that name, he is one of the most respected value investors alive. He added 625,000 shares, bringing his total position to 3.74 million shares worth nearly $900 million.

When a deep value guy like Clarman is buying a stock like Amazon, that has to get your attention. At least ask why that is. And then Viking Global more than tripled their position, going from 1.2 million shares to 3.7 million shares.

Now, it wasn't all buying. Bill Aman trimmed his position from 11 and a half million shares down to 8.6 million. But even after the trim, Amazon is still one of his top holdings. So he didn't leave, he just took some off the table.

And that could be because he found a better opportunity elsewhere. There are a lot of reasons why that could have happened. So when you see Junken Miller, Ter, Clarman, and Viking all buying aggressively in the same quarter, that's probably not a coincidence. That's conviction.

And it doesn't mean you should blindly follow, but it does mean that you should ask questions and pay very close attention to what they're seeing. And guys, this is exactly why being in our community matters. While the headlines are going back and forth on Amazon, our members inside the community are doing the real work.

Now, let's flip it. I'm going to give you the bare case because if you're going to own Amazon, if you're going to own any company, you need to know what could go wrong, you absolutely have to understand both sides of the coin.

Bare case number one, the spending is absolutely historic and it just destroyed free cash flow. This is the bare case with the sharpest teeth. Amazon raised its fullear 2026 capex guidance to between 200 and $220 billion.

That means they're reinvesting that huge sum of money into the business to help it grow. In just the most recent quarter, spending skyrocketed 68% to 54.2 billion.

And here's the number that really stings. trailing 12-month free cash flow has gone from a positive number to a negative 7.6 billion, guys. That's a negative. That's cash going out.

Amazon, a company that investors have relied on to generate cash in the last few years, is now going back to the old days and burning right through it. The bears say that this is the real risk behind the AI story. What if demand slows down? Amazon would be stuck holding hundreds of billions in expensive depreciating data centers and hardware that it can't properly fill.

The spending has to earn a return. And right now, the bills are coming in a lot faster than the payoff. That's exactly why our fifth tenant of principal driven investing is a great story becomes a bad investment if you pay the wrong price. The price you pay is what determines how successful an investment is.

Bearcase number two, the debt is piling up and the margins are starting to feel it. To fund all of this without free cash flow, Amazon has had to borrow money, a lot of money. Long-term debt has ballooned from 65.6 billion to $119 billion. That's almost double.

And carrying that much debt means that interest expenses are climbing at exactly the wrong time when the company's also dealing with rising tariffs, fuel inflation, and an 80 basis point foreign exchange headwind.

And here's something that even the bulls should pay attention to. AWS operating margins actually went down a little bit. They went from 39.5 down to 37.7%. Now, if they're still able to grow at high rates, even losing a little margin still adds a ton of money to the bottom line.

So, yes, the cloud business is growing, but the heavy depreciation from all that new infrastructure is starting to eat into the margins. The bears say that this is an early warning sign. If margins keep compressing while debt keeps rising, the earnings growth story changes and so does the valuation.

Bear case number three, the government's coming. And this isn't just a fine. This is the bear case that most people aren't paying enough attention to. The FTC, the Federal Trade Commission, alongside 17 state attorneys generals, is actively pursuing a historic antirust lawsuit against Amazon. The trial is officially scheduled to begin in late 2026.

The core accusation is that Amazon holds monopoly power over both online shoppers and the independent sellers on its platform. That it acts as both the player and the referee.

And here's a number that every Amazon shareholder should know. Amazon's take rate, that's the cut it extracts from thirdparty sellers for fulfillment, advertising, referrals, has quietly climbed to an average of 47% of every single sale. Almost half.

The bears say if the government forces Amazon to lower those fees, it would decimate the high margin retail profits that help fund everything else. The cloud buildout, the spending, the drone program, all of it.

Guys, I've got a business called Fit Active Sports. At one point, we had the number one selling weightlifting glove on Amazon. And guess what? Because of the fees and because of Amazon's a little bit ridiculous rules, we lost that status. And we're still trying to climb back. and it's been a few years. They are very expensive.

But at the end of the day, I always say, where else can you go to start selling millions of dollars of product very quickly? So, there is a trade-off. And at some point, that 47% if it keeps growing, will make it not possible.

But it's amazing to me that we can buy products for $4, sell them on Amazon for 20, and after everything is left over, all the all the overhead, everything, we're making five or 6% on our money.

But it gets bigger than fees. The FTC is chasing structural remedies, not just a slap on the wrist. They're talking about forcing Amazon to completely separate its fulfillment and delivery network from its e-commerce store.

The whole magic behind Amazon Prime, the ultra fast, lowcost delivery that keeps 200 million members paying every year depends on Amazon controlling that logistics network end to end.

If that gets stripped away, the bears say that Prime as we know it could fundamentally be degraded. And if you think this is just talk, look at what Amazon's own legal team is doing. Just last week on August 14th, Amazon quietly reinstated binding arbitration clauses in its terms of service, stripping US customers of the right to file class action lawsuits.

The Bears see that as a company bracing for a wave of legal battles through the end of 2026 and into 2027. This threat feels a lot more real now after the federal rulings against Google's search and adtech monopoly earlier this year.

The bears say this isn't priced into the stock. And if the government wins, it could fundamentally change what Amazon looks like as a business. So the question is, who's right? The bulls, the bears, or some combination of both? Our next step is to analyze it ourselves by combining the story and the numbers together.

Now guys, really quick before we dive into the numbers on Amazon, I want to remind everybody, never take our title and thumbnail literally. We're never here to give a stock tip.

We're here to teach that price and value are two different things. So, let's pull up Amazon in our software, which I love to use on a daily basis. So, guys, when people talk about a price of a company, they go to the stock price. I go to the market cap, which is the price of the stock multiplied by the number of shares outstanding. It is 2.85 trillion.

The next thing I do is I go to that enterprise value. The difference between these two right here, it's 3.27 27 versus 2.85, let's call it $400 billion. That difference is essentially their debt. And that has grown a lot in the last few years.

The next thing I'll do is compare it to its free cash flow. Guys, in the last 12 months, their free cash flow is actually negative 12 billion. So, there's a lot of debt here.

Now, let's go to their history of free cash flow. How do we do that? We go to our financials. We go to the cash flow statement. They have $400 billion in debt. I added this line to all our financials to see the free cash flow, guys. It's a lot of debt. Their best year ever was $33 billion in free cash flow. So, even at 400 billion, that's 13 times their free cash flow.

Now, if they're investing all this money, because look at the capital expenditures and how they've skyrocketed. 10 years ago, Amazon did 8 billion in capital expenditures. They just did 173 billion in the last 12 months, and it's expected to go up even higher. as I said earlier.

So, how much money would they have to generate? How much more debt can they take on where it ends up being okay? That's the real bare case that people are asking. If it doesn't pay off, they're left with this mountain of debt.

Fair enough. Let's go back to the metrics here, guys. Next thing I do is I look at the return on capital. 5 years is 8.7, one year is 10.5. So, it's getting better, which I love.

Another thing I love here, look at the profit margin. 10-year average is 7.6. 5-year

And if the government wins, it could fundamentally change what Amazon looks like as a business.

So, let's pull up Amazon in our software, which I love to use on a daily basis.

And this gross profit, which is the profit on every single extra unit they sell, keeps growing. Why? because AWS is so profitable that as they grow more of their sales into AWS, that's going to keep going higher.

And guys, they still have great revenue growth. 20 and a half% a year for the last 10, 12% for the last 5, 13% for the last three. And even though they've made acquisitions over the last 5 years, 27 billion, it's only 1% of their entire current market cap over the last 5 years. So, I'm not as worried about that.

Let's go take a look at the eight pillars. I wonder how ugly this is going to look. Don't even care. Like, these are all X's here. But guys, as we all know, there is so much more to Amazon. This is something I learned the hard way 10 years ago. There's so much more to Amazon than just these short-term numbers. They are making a real business, and they they they make life easier for everybody that buys from them. Let's go check out the analyst estimates real quick.

So, before we go figure out what the stock is worth to me, the analyst estimates, I'm actually surprised by this. $9 per share this year only basically doubling over the next seven years. That's only 10% earnings per share growth in the next seven years. Kind of surprising to me. And look at revenue. Revenue also doubling. So here's what confuses me. It doubles from 840 billion to 1.66 trillion. So they're going to double their revenue. They're going to have high gross margin. Their profit margin keeps getting higher, but analy analysts think they're only going to double their profit along with double of revenue. I would have thought profit if revenue doubled in a company like this, I would have thought profit should go up 3x. I'm a little confused by that. But these are analysts. Let's see uh what we think.

And guys, as a reminder, if you're in our community, just remember those bull and bear cases we pulled up, we got from our AI tool in our software. You just go in here, it just pops up for you. You're able to ask it any question. Say, "What are the top three bull cases and bare cases for Amazon or any company?" And it'll spit it out for you.

So now, here we are at the stock analyzer tool. Now guys, this is where we put the story and the numbers together. And I always tell people, do this early on so you don't waste time on companies that are so far away from your value. Guys, I did a 10-year analysis. The very first question, what's the revenue growth I'm going to assume for the next 10 years? Guys, I did 4, 8, and 12%. Might be a little conservative. After all, analysts were expecting 10% a year for the next seven. So, this might be too conservative, but I'm okay with that.

Next, profit margin. I did 8, 12, and 16. Now, here's what's interesting. They did 17.5% last year. I have 16% here. So, you know what? I'm willing to bump this a little bit. Let's do 12, 16, and 20. With a company that's 50% gross margins and growing, I'm okay with this.

Next, what PE or price of free cash flow would I sign to this business 10 years from now? This isn't what's the PE today, what's the average going to be? It's what would I assign 10 years from now? Guys, Amazon is an incredible moat business. That that term is overused, but clearly we all adore and love Amazon and use it. Next, their returns on capital are getting better and they're ingratiating our lives more and more every single year. I actually think this might be low. I put 20, 23, and 26. I could understand if somebody went higher than that.

And then finally, desired return. Guys, I always put in I'm going to start putting in 9 and a half% because I always say 9 to 10%. I'm going to start putting in 9 and a half%. Because that's basically the market return in history. Now, if you're going to buy an individual company, don't put in the market return. You got to put a higher number in. But the reason I don't do that is everybody's number is different based on your life situation, based on your knowledge of Amazon, based on your risk tolerance. So I'm going to put in 9 and a half%.

And guys, after I'm done running this one, stay with me because I'm going to put in my personal return and explain that to you. So I hit the analyze button. The stock's at 260. Wow, this is interesting. I have a low price of 160, high price of 607, middle price of 320. Mostly because I increased their profit margin. If that profit margin still stays low, that's going to change this number quite a bit. So based on today's price, I can expect a 12.4% return if my middle assumptions occur.

The question I have for you, is that enough? Old Paul would have said that's enough for me. New Paul is different. I really had a lot of changes in my life where I realized that 70 75% of my net worth is invested in real estate and businesses. So for me to go buy an individual stock, I want a really good return. What's my return requirement? It's actually 15% now. Now guys, that should not be yours. I don't know what the right one is for you. I used to do 12%. Now I'm sitting there saying, listen, I only want to buy a company if it's a screaming deal. So I put 15% in, kept all my other assumptions the same. I hit the analyze button, and for me, I need a low price. I have a low price of 110, high price of 400, middle price of 215. So I'm going to add it to my watch list. Now it's currently I'm going to add it to my watch list at 230. Now the reason 230 is even though my price is 215 in the time it takes maybe to fall to 230 I might the fundamentals might get better and then I'm going to sit here run the numbers again and sell cash secured puts which allows me to buy the company be paid to buy the company at a lower price.

Guys, check out this reel that we made recently where one of our community members asked me an incredible, incredible question that I loved. And here was my answer. Amazon. I look at Amazon and I love Can I say Bergkshire? But they don't really do one thing. Like I think it's unfair for it to say Bergkshire. If I'm gonna say a business that does like very kind I think I look at Amazon going oh that's so hard 30 years though but Amazon they just make I like Jeff Bezos's philosophy of I'm always trying to think about what's not going to change and people want cheaper and faster at all times. I just look at Amazon as becoming like the go-to. I mean look at Walmart in the mid '90s. Tim, you were in high school in the mid '90s. Like we all went to Walmart like and it was dominant back then and it's still dominant now. You know what I mean? Is it the dominant retailer? No. Amazon's there but it's not like it's a shitty company. It's still a top company just like Target is. Target's still a go-to company. It's just if you're asking me for the number one position, I would still bet on like Google or Amazon.

Yeah, because they're incredible. I mean, they just they're they're they're very customer focused. That's what I like about them. And even though they've made acquisitions over the last 5 years, 27 billion, it's only 1% of their entire current market cap over the last 5 years. So, I'm not as worried about that.

But guys, as we all know, there is so much more to Amazon. This is something I learned the hard way 10 years ago. There's so much more to Amazon than just these short-term numbers. They are making a real business, and they they they make life easier for everybody that buys from them.