QSQuantSignals Research/Scion Template
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QS Research · Michael Burry's Scion Capital analyst template · 2006

AMAZON COM INC (AMZN)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case 0% · downside -26% · upside +24%

At $251.73, AMZN trades at 20.2x TTM/FY Sep 2026 net income of $134.78B, equal to its $2,721.99B market cap. Pricing the same earnings base at 15x gives $2,021.7B (-25.7%) and at 25x gives $3,369.5B (+23.8%), so there is no margin of safety and the downside case exceeds the -25% threshold. Massive AI capex has pushed TTM free cash flow to -$46.89B while insiders only sell, making current earnings-based valuation hard to underwrite. Yet AWS growth, record 13.9% operating margin, and Anthropic/OpenAI catalysts make a short dangerous. I would wait for either a lower entry price or durable positive free-cash-flow inflection before going long.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Amazon.com is organized into three segments: North America, International, and AWS. It earns through consumer retail and devices, seller services, subscriptions such as Prime, AWS technology services, content publishing, and advertising. Between FY2020 and FY2025, revenue grew from $386.06B to $716.92B and headcount from about 1,298,000 to 1,576,000 employees.

  2. ✓ 2. Competitive advantage

    S25 and S26 describe intense, broadening competition across many sectors and identify price, selection, and convenience—not a durable moat—as the key retail competitive factors. FY2020–FY2025 data shows large absolute scale and rising operating income and cash flow, but no margin or return history is provided; net income was negative in FY2022.

  3. ✓ 3. 10-Q takeaways

    In Q3 2026 (ended Sep 30, 2026), Amazon's consolidated net sales rose 12% y/y to $201.9 billion and nine-month sales rose 16% to $584.1 billion, led by 39% AWS growth. Operating income climbed to $28.1 billion in Q3 2026 from $17.4 billion a year earlier, with cost of sales falling to 46.8% of net sales; cash and marketable securities were $114.2 billion, while trailing twelve-month free cash flow was negative $(42.4) billion. Q4 2026 guidance calls for net sales of $240–247 billion and operating income of $28.5–33.5 billion, with 2026 cash capex of about $220 billion.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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