Amazon 2025: Still Crushing It or Finally Slipping?

Ever wondered how a tiny online bookstore turned into a global tech giant?

It all started in a garage in Bellevue, Washington, in 1994.

Jeff Bezos, a young Princeton grad, had a bold idea, sell books on the internet.

Sounds obvious now, but back then? It was revolutionary.

At first, he named it "Cadabra" to evoke a sense of magic.

But when his lawyer misheard it as "cadaver," Bezos knew it needed a rebrand.

Enter Amazon.com, exotic, expansive, and ambitious, just like the river it was named after.

By July 16, 1995, Amazon.com was live.

Picture it: Bezos and his small team, working from his garage, packing books on the floor.

Every sale rang a literal bell.

Within two months, they were making $20,000 a week.

The office? Far from fancy.

Desks were just doors from Home Depot with makeshift legs.

But the energy was electric, it felt like the start of something big.

Fast forward to 2025, and that scrappy little bookstore is now a tech powerhouse.

Amazon just reported its Q4 2024 earnings a 10% year-over-year increase, with net sales hitting $187.8 billion.

But the stock took a 3.5% hit on February 7. Why?

Investors are uneasy about Amazon's $100 billion capital expenditure plan, mostly aimed at AI.

Meanwhile, AWS, the company’s cloud arm just crossed $100 billion in annual sales for the first time.

Amazon’s workforce now stands at 1.5 million people worldwide, but controversy looms.

The company’s strict return-to-office policy five days a week for 350,000 corporate employees has sparked backlash.

Still, Amazon’s numbers are staggering.

The company sells 600 million items and ships 1.6 million packages daily.

From a garage startup to over 300 million active consumer accounts, Amazon’s journey is nothing short of extraordinary.

Now, let’s talk numbers.

Financial Performance

Amazon's latest figures are eye-popping.

Q4 2024 saw net sales hit $187.8 billion, up 10% year-over-year.

Net income? Nearly doubled to $20 billion.

Earnings per share? $1.86, smashing the expected $1.49. AWS?

Growing strong at 19%, raking in $28.8 billion.

For the full year 2024, Amazon's net sales jumped 11% to a whopping $638 billion.

Net income? Up 94% to $59.2 billion.

These aren't just numbers.

They're a clear message: Amazon isn't just growing, it's thriving.

Amazon's Q4 2024 results demonstrate robust growth across all segments.

The North America segment, which includes the core e-commerce business, continues to be the largest revenue generator with a solid 10% year-over-year growth.

This growth is particularly impressive given the segment's already massive scale, indicating Amazon's continued dominance in the U.S. e-commerce market.

The International segment's 8% growth (9% excluding foreign exchange impact) indicates Amazon's expanding global presence.

This growth is noteworthy as it comes despite challenges such as economic uncertainties and increased competition in various international markets.

Most notably, AWS maintains its strong momentum with a 19% year-over-year increase, highlighting the continued demand for cloud services and Amazon's leadership in this space.

The consistent high growth rate of AWS is crucial for Amazon's overall profitability, as it remains the company's most lucrative segment.

Income Statement Summary (GAAP)

The income statement reveals significant improvements in Amazon's profitability.

The 60.6% increase in operating income and 88.7% jump in net income demonstrate the company's ability to scale efficiently and leverage its massive revenue base.

The substantial improvement in earnings per share (EPS) from $1.00 to $1.86 reflects Amazon's focus on shareholder value creation.

Cash Flow Statement Summary

The Amazon’s cash flow statement highlights its strong cash-generating capabilities.

The 36.5% increase in operating cash flow to $115.9 billion demonstrates the company's operational efficiency and ability to convert sales into cash.

The modest 3.8% growth in free cash flow, coupled with the substantial 61.5% increase in capital expenditures, indicates that Amazon is heavily reinvesting in its business.

The sharp rise in capital expenditures likely funds AWS expansion and logistics.

This shows Amazon's focus on long-term growth and staying competitive.

Balance Sheet Highlights

The Amazon’s balance sheet reflects its strong financial position.

The significant increase in cash and equivalents provides Amazon with substantial financial flexibility for future investments, acquisitions, or shareholder returns.

Total equity growing faster than liabilities signals better financial health and stronger internal funding for growth.

Strategic Initiatives and Partnerships

AI and Cloud Computing

Amazon is doubling down on AI and cloud infrastructure with a massive $100 billion capital expenditure plan for 2025.

This investment is focused on expanding AWS capabilities, launching new AI models, and increasing custom AI chip production.

CEO Andy Jassy described AI as a "once-in-a-lifetime opportunity," indicating Amazon's commitment to maintaining its leadership in cloud services and AI technologies.

Renewable Energy Partnerships

Amazon has expanded its renewable energy partnership with Iberdrola, agreeing to purchase 476 MW of solar and wind energy in Spain and Portugal.

This aligns with Amazon's goal of powering its global operations with 100% renewable energy, which it achieved in 2024, seven years ahead of its initial target.

Automotive Collaborations

Amazon is entering strategic partnerships in the automotive sector.

A collaboration with Qualcomm Technologies aims to enhance in-vehicle experiences using AI services and cloud capabilities.

Additionally, Amazon has partnered with HERE Technologies to accelerate the development of Software-Defined Vehicles (SDVs).

Retail Innovation

Amazon continues to innovate in retail, announcing that customers in 48 U.S. cities can now buy new Hyundai vehicles directly on Amazon from local participating dealers.

This move represents a significant expansion into the automotive retail space.

Opportunities

Amazon’s momentum shows no signs of slowing.

Let’s dive into its latest moves.

AI & Cloud Computing: Surging Ahead

The AI market is now projected to hit $2 trillion by 2030.

Amazon’s $5 billion data center in Ohio is live, while an $11 billion facility in Georgia will go online later this year.

AWS outperformed expectations, hitting a $120 billion annual run rate in Q4 2024.

The cloud computing market is now on track to reach $1.3 trillion by 2026.

Global E-Commerce: Expanding Reach

International sales jumped 10% in Q4 2024, reaching $47.7 billion.

The launch of Amazon.ie in Ireland marks its 23rd global marketplace, outpacing original plans.

Advertising: Strong Performance

Amazon's ad business grew 20% to $20.8 billion in Q4.

New Prime Video ads in Brazil, India, Japan, the Netherlands, and New Zealand are already delivering results.

Healthcare: Scaling Fast

Amazon Pharmacy added same-day delivery to 15 more cities, with 10 more planned by 2025.

The integration of One Medical Pay-per-visit with Amazon Pharmacy boosted user adoption by 30% since November 2024.

Sustainability: Beating Targets

Amazon eliminated 100% of plastic air pillows in North America ahead of schedule.

Packaging weight has dropped 48% since 2015.

Grocery: Rapid Expansion

The new Amazon Grocery concept in Chicago is a hit. Twenty more U.S. locations are coming by late 2025.

Whole Foods sales are up 15% year-over-year.

Tech & Seller Support: Innovation in Action

Amazon’s Vision-Assisted Package Retrieval (VAPR) now powers 60% of delivery vans, with full rollout by 2025.

Five new Regional Global Selling Centers boosted cross-border e-commerce by 25%.

With strategic investments and relentless innovation, Amazon remains a powerhouse in tech and e-commerce.

Risks

Amazon is facing one of its most challenging years yet.

Slowing growth, regulatory battles, and rising costs threaten its dominance.

Slower Growth, Bigger Pressures

Amazon expects Q1 2025 revenue of $151-155.5 billion well below analyst forecasts of $158.6 billion.

Growth could slow to just 5-9%, its worst on record. Foreign exchange losses alone may cost $2.1 billion.

Inflation and possible recessions could hit consumer spending hard.

Online sales grew just 7% year-over-year last quarter, showing a clear slowdown.

AI & Cloud Computing Headaches

AI is a massive opportunity, but Amazon is struggling to keep up.

AWS growth slowed to 19%, trailing Microsoft Azure (31%) and Google Cloud (30%).

Supply chain issues are limiting chip availability, and delays in Amazon’s Trainium 2 chip are adding to the problem.

Amazon is pouring $105 billion into AI and cloud infrastructure this year, up from $83 billion in 2024.

While this could pay off in the long run, it’s straining short-term profits.

Regulatory & Legal Storms

The FTC and 17 states are suing Amazon for alleged monopolistic practices, with a trial set for 2026.

The EU is also investigating whether Amazon favors its own products, which could lead to massive fines.

A proposed 10% U.S. import tariff could drive up costs, making pricing strategies even more complicated.

Operational & Strategic Risks

Amazon’s supply chain remains fragile, with labor disputes and warehouse strikes adding to the risk.

Cybersecurity threats loom large, as Amazon’s vast customer data makes it a prime target.

AI ethics are another concern.

If Amazon’s AI systems show bias, it could spark backlash and regulatory trouble.

Talent retention is a growing problem.

With competitors offering lucrative opportunities, keeping top AI and engineering talent is getting harder.

Sustainability remains a challenge.

While Amazon has cut packaging waste, its data center and delivery network expansion put its environmental commitments to the test.

Amazon’s future depends on how well it tackles these challenges.

Huge investments in AI and cloud could pay off, but the short-term outlook remains tough. The company must move fast or risk losing ground.

Love what you're reading?

Chasing.money is a small pub with big ideas. Help us grow! Share our newsletter with those who want the real story.

Reading this in your email? Forward it to your contacts and help us reach more people. Thank you for your support!

Claim Your Free Gold IRA

Claim your free Gold IRA Guide and discover the crucial steps to take when opening your Gold IRA!

Disclaimer: This newsletter is for educational purposes only and should not be considered financial advice. Always conduct your own thorough research before making any investment decisions.