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Warren Buffett dumps $1.7B of Amazon stock

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Re: Warren Buffett dumps $1.7B of Amazon stock

#61

Post by nickff »

jcheng wrote: post #55
legitster wrote: post #45

Earlier quoted context omitted.

This is correct, but it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue. You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.

The revenue curves do indeed look a bit different: https://www.macrotrends.net/stocks/stock-comparison?s=revenu... Even more so if you compare EBITDA: https://www.macrotrends.net/stocks/stock-comparison?s=ebitda...

It seems like AMZN has significant growth priced-in to the stock, but retail growth will become increasingly challenging as their market share increases.

Re: Warren Buffett dumps $1.7B of Amazon stock

#62

Post by s-kymon »

stackghost wrote: post #48
philip1209 wrote: post #20

Warren Buffet retired. This is Berkshire Hathaway.

My understanding is that Warren gave up his seat as CEO but is still the chairman, and is still at least peripherally involved in investment decisions at Berkshire

Also these are year end portfolio changes, so could very well be Warren.

Re: Warren Buffett dumps $1.7B of Amazon stock

#63

Post by Reason077 »

legitster wrote: post #45
Aurornis wrote: post #31

Earlier quoted context omitted.

> Amazon's core business does not make sense. Despite being so massive, their retail operation makes almost no money. Net profit margins for retail are only around 3% across the industry. Amazon isn't actually doing anything unusual in that regard. Retail is just a very low profit margin business whether it's physical or online. These numbers are always confusing to those of us in the tech world where SaaS net profit…

This is correct, but it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue. You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.

> ”it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue.”

Why does Tesla have 15x the market cap of BYD, despite BYD selling more cars, having more revenue, and much faster revenue growth?

Re: Warren Buffett dumps $1.7B of Amazon stock

#64

Post by mfrye0 »

legitster wrote: post #23

Amazon's core business does not make sense. Despite being so massive, their retail operation makes almost no money. There is little market share left for them to win, the best they can do to grow is shave expenses. AWS has been their real money maker, but also the explosion of AI and server farms has worked against them in threes ways: there is much more competition on infrastructure, the costs to run infrastructure…

Relevant data point on AWS - GCP is giving out a ton of cloud credits to startups. On average $100k in comparison to $10k-20k from AWS.

Before Claude Code, a full cloud migration could easily be a couple months. We migrated our whole stack to GCP in about a week. It's trivial to switch clouds now with K8 stack and Claude Code.

Re: Warren Buffett dumps $1.7B of Amazon stock

#65

Post by Aurornis »

legitster wrote: post #45
Aurornis wrote: post #31

Earlier quoted context omitted.

> Amazon's core business does not make sense. Despite being so massive, their retail operation makes almost no money. Net profit margins for retail are only around 3% across the industry. Amazon isn't actually doing anything unusual in that regard. Retail is just a very low profit margin business whether it's physical or online. These numbers are always confusing to those of us in the tech world where SaaS net profit…

This is correct, but it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue. You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.

> This is correct, but it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue

Because Amazon and Walmart are two different companies with very different product offerings.

Retail can only grow so far. AWS continues to grow at a relatively incredible rate compared to Walmart's business.

Re: Warren Buffett dumps $1.7B of Amazon stock

#67

Post by criddell »

legitster wrote: post #23

Amazon's core business does not make sense. Despite being so massive, their retail operation makes almost no money. There is little market share left for them to win, the best they can do to grow is shave expenses. AWS has been their real money maker, but also the explosion of AI and server farms has worked against them in threes ways: there is much more competition on infrastructure, the costs to run infrastructure…

> There is little market share left for them to win, the best they can do to grow is shave expenses.

I think Amazon netted something like $70 billion last year. What's the problem with them just staying the course and earning tens of billions of dollars in profit year-after-year-after-year?

Re: Warren Buffett dumps $1.7B of Amazon stock

#68

Post by NoMoreNicksLeft »

legitster wrote: post #45
Aurornis wrote: post #31

Earlier quoted context omitted.

> Amazon's core business does not make sense. Despite being so massive, their retail operation makes almost no money. Net profit margins for retail are only around 3% across the industry. Amazon isn't actually doing anything unusual in that regard. Retail is just a very low profit margin business whether it's physical or online. These numbers are always confusing to those of us in the tech world where SaaS net profit…

This is correct, but it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue. You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.

>You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.

How many decades now have we lived in a world where the demand for investment far outstrips sane investment opportunities? In such a world, do stock prices have to be justified as you insinuate? And what happens when the prices are far higher than can be justified? I ask not rhetorically, but rather whether I should be hoarding shotgun shells and canned goods and hiding in the basement.

Re: Warren Buffett dumps $1.7B of Amazon stock

#69

Post by baggachipz »

malfist wrote: post #13
giancarlostoro wrote: post #4

Next time Amazon goes low I'm sure he'll buy it all back at a discount. With all his wealth he can get away with slow patient investing with swathes of cash.

Amazon just shed $450 billion in value. It's low right now.

Another Prime membership fee increase, incoming!

Re: Warren Buffett dumps $1.7B of Amazon stock

#70

Post by taeric »

legitster wrote: post #45
Aurornis wrote: post #31

Earlier quoted context omitted.

> Amazon's core business does not make sense. Despite being so massive, their retail operation makes almost no money. Net profit margins for retail are only around 3% across the industry. Amazon isn't actually doing anything unusual in that regard. Retail is just a very low profit margin business whether it's physical or online. These numbers are always confusing to those of us in the tech world where SaaS net profit…

This is correct, but it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue. You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.

Comparing to Walmart, though, I would expect higher growth. Would you not?
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