Peter Smith
⬤ Amazon (AMZN) closed at $227.01 after a year that delivered only a 0.41 percent gain. The stock price itself is not the main point - the key development is hidden in the operating data. Amazon Web Services now generates revenue at an annual rate of $132 billion. That figure leads traders to reassess the future value of the entire firm.
⬤ The price chart shows the usual pattern of volatility. AMZN traded between $150 and $250 for most of the year. It touched a low near $170 in early 2025 then rose through the summer. By December the price had returned to the middle of the range and has stayed there. Analysts currently model AWS revenue at $328 billion for 2030, provided the segment grows at an even 20 percent each year.
⬤ The valuation exercise is straightforward. Take the projected 2030 revenue of $328 billion, assume a 30 percent net margin then apply a 25-times exit multiple. The result is a stand alone value of $2.46 trillion for AWS. Amazon's entire market capitalisation is about $2.4 trillion this day.
⬤ The chart does not display future estimates - yet the steady rebound through this year's swings shows what investors have in mind. When one division appears to be worth at least as much as the whole corporation, attention rises. That situation now applies to Amazon - the cloud narrative is altering how Wall Street prices AMZN, even while the share quote moves sideways.
Peter Smith
