Amazon.com Inc (AMZN)

Amazon is two businesses with very different economics wearing one ticker, and valuing it means separating them. This page covers the moats, the margin question, and what to check.

The business

Retail is enormous, low margin and capital hungry. AWS is smaller by revenue and produces the majority of operating profit. Advertising has quietly become a third pillar with margins closer to AWS than to retail. Anyone modelling Amazon on consolidated figures is averaging three businesses that should be valued separately.

The moat

Two distinct moats. Retail has network effects — more sellers attract more buyers, which attracts more sellers — plus a logistics network competitors would need years and enormous capital to replicate. AWS has switching costs: once an application is built on a cloud provider’s services, moving means re-architecting it. The second moat is the more durable of the two and the one attached to the profits.

What to check before you value it

• Operating margin trend — Amazon spent two decades being judged on growth and is now judged on whether margins hold. The trend matters more than any single quarter.
• AWS growth against Azure and Google Cloud — Relative growth tells you whether share is being won or lost, which consolidated revenue does not.
• Capital expenditure — Consistently heavy, and it determines free cash flow. Compare it to operating cash flow over several years, not one.
• Advertising revenue — High margin and growing. Frequently under-modelled because it is disclosed less prominently than retail or AWS.

How much of it you already own

Amazon is around 4.1% of the Vanguard S&P 500 UCITS ETF as at July 2026. See what is inside an ETF.

Recent filings

The margin figure was the one that changed the case. An operating margin above 11% for the first time suggested the retail business could be run for profit rather than perpetual reinvestment, which is a different company from the one investors had priced for two decades.

How Oak Growth scores it

Oak Growth runs Amazon through the same four pillars as every other company it covers — moat, management, economics and value — and publishes a discounted cash flow intrinsic value alongside the margin of safety against the current price. Because those figures move with the market and with each set of results, they live in the app rather than on this page. See the 4-pillar method →

Common questions

Is Amazon.com Inc undervalued?

That depends on the price on the day you ask. Oak Growth publishes a discounted cash flow intrinsic value for Amazon.com Inc and the resulting margin of safety, updated from live market data rather than a fixed figure. The checks that decide it are set out on this page.

Does Amazon.com Inc have an economic moat?

Two of them. Retail has marketplace network effects and a logistics network that would take years and enormous capital to replicate; AWS has switching costs, because applications built on one cloud provider are expensive to re-architect elsewhere.

Is AMZN in index funds and ETFs?

Yes. Amazon was roughly 4.1% of the Vanguard S&P 500 UCITS ETF as at July 2026, so most US and global index funds hold a meaningful position.

How do you value Amazon.com Inc?

Value the segments separately. Retail, AWS and advertising have very different margins and capital requirements, so a single multiple applied to consolidated earnings will be wrong in both directions at once.

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