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Amazon.com
- Sector: ConsumerTechnology Media and Telecommunications
- Sub Sector: Retail/GrocersTechnology
- Region: US
- Bond: AMZN 4.65 29
- Indicative Yield-to-Maturity (YTM): 3.99%
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Fundamental View
AS OF 19 Dec 2025We continue to have confidence in CEO Andy Jassy and the company’s long-term business for both AWS and Stores. AWS is a $132 bn run-rate business growing at 20% with GAAP operating margins in the 30s%. The 3Q25 results and commentary supports our view that Amazon will be a winner in Generative AI given the breadth of its cloud business, custom silicon (Trainium), and Bedrock service.
While AMZN’s capex has been ramping, along with other hyperscalers, we are encouraged by its debt reduction over the past few years and zero shareholder returns. There are risks related to its ongoing FTC suit although we view a breakup as unlikely. Pro forma for $15 bn issuance and $1.25 bn upcoming maturity, gross lease-adjusted leverage will increase by one tick to 1.0x.
Business Description
AS OF 19 Dec 2025- Amazon is an e-commerce company which sells a wide range of its own products and those of 3rd party sellers. Amazon offers fulfillment services for 3rd party sellers (FBA) and sells cloud computing services (AWS). In 3Q25, 3rd party units were 62% of total paid units, and FBA units are a majority of 3rd party units.
- In LTM 3Q25, NA segment was 60% of sales, International was 22% of sales, and AWS was 18% of sales.
- Amazon disclosed it surpassed 200 mn Prime members in April 2021. The annual membership was increased in February 2022 from $119 to $139 in the US, although fees vary by country. In mid-2019, Amazon Prime began to transition from 2-day to 1-day shipping. Amazon Prime also offers Prime Video, streaming music, and other benefits.
- In 2006, Amazon launched AWS which remains the leader in cloud computing (IaaS/PaaS). Amazon sells its own devices (e-reader, smart speaker, streaming media player, etc.).
Risk & Catalysts
AS OF 19 Dec 2025We think Amazon has moderate event risk given its large size (~$2.4 tn market cap).
Amazon’s capex has been ramping for AI cloud infrastructure, which could lead to more jumbo bond deals in 2026.
In September 2023, the FTC and a consortium of states filed a lawsuit against Amazon and accused the company of (1) punishing sellers for offering lower prices elsewhere and (2) making Prime eligibility conditional on usage of fulfillment services. Motions for summary judgment are not due until August 2026 with a trial scheduled for February 2027. The biggest risk would be a breakup, although we view that as unlikely.
Amazon’s $14 bn acquisition of Whole Foods has shown its proclivity for large M&A.
Key Metric
AS OF 19 Dec 2025| $ mn | 2020 | 2021 | 2022 | 2023 | 2024 | LTM 3Q25 |
|---|---|---|---|---|---|---|
| Revenue YoY % | 37.6% | 21.7% | 9.4% | 11.8% | 11.0% | 11.5% |
| EBITDA | 57,284 | 71,994 | 74,593 | 110,305 | 144,162 | 161,740 |
| EBITDA Margin | 14.8% | 15.3% | 14.5% | 19.2% | 22.6% | 23.4% |
| CapEx % of Sales | 12.1% | 13.3% | 11.5% | 8.5% | 12.3% | 17.1% |
| Sh. Ret. % of CFO-CapEx | 0% | 0% | n/m | 0% | 0% | 0% |
| Net Debt | (50,497) | (44,453) | 8,516 | (19,451) | (43,051) | (38,880) |
| Gross Leverage | 0.6x | 0.7x | 1.1x | 0.6x | 0.4x | 0.3x |
| EV / EBITDA | 28.3x | 23.3x | 11.7x | 14.4x | 16.1x | 14.5x |
CreditSight View Comment
AS OF 17 Nov 2025We continue to have confidence in CEO Andy Jassy and the long-term business for AWS and Stores. AWS is a $132 bn run-rate business growing at 20% with GAAP OM% in the 30s%. The 3Q25 results and commentary supports our view that Amazon will be a winner in Generative AI given the breadth of its cloud business, custom silicon (Trainium), and Bedrock service. While AMZN’s capex has been ramping, along with other hyperscalers, we are encouraged by its debt reduction over the past few years and zero shareholder returns. There are risks related to its ongoing FTC suit (not the one that was recently settled on Prime subscriptions) although we view a breakup as unlikely. Pro forma for $15 bn issuance and $1.25 bn upcoming maturity, gross lease-adjusted leverage will increase by one tick to 1.0x.
Recommendation Reviewed: November 17, 2025
Recommendation Changed: May 01, 2024
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