A New Top Dog In Revenue
Big news last week.
One company just dethroned another to take the top spot in total revenue.
Not just for the United States, but the entire world.
Since 2013, Walmart (ticker: WMT) has had the most revenue of any company.
But it just got overtaken.
Amazon (ticker: AMZN) is now the leader in the clubhouse with over $700 billion in revenue in 2025.
Amazon’s growth has been remarkable.
15 years ago, Walmart had more than 10x Amazon’s revenue.
You’d think Amazon being the new leader in revenue would be great news for the stock.
But the opposite has been true.
Amazon’s stock price is down over the last 12 months.
And recently, it’s been rough.
So far, Amazon’s stock has fallen almost 15% since the calendar changed to February.
What’s going on?
It’s a similar story to Microsoft’s (ticker: MSFT), which we discussed a few weeks ago.
Amazon’s management is planning to spend over $200 billion in capital expenditures (Capex) in 2026.
It’s a big jump, especially compared to $130 billion in Capex Amazon spent in 2025.
The increase in spending is largely to support Amazon Web Services (AWS), its cloud computing product used for AI development.
Concerns about AI are worrying investors, who are dumping the stock.
Similar to Microsoft, the drop is overblown.
We want our companies investing in their most profitable business.
Which is exactly what Amazon is doing
AWS accounts for about 18% of Amazon’s revenue, but more than half of its operating profit.
AWS’s operating margin, which is its operating profit divided by sales, is more than 6x higher than the rest of the company’s.
A huge investment in AWS is a risk.
Spending so much money will probably lower margins.
But Amazon is already incredibly profitable.
The company made $77 billion in profit last year.
If you’re worried AI is overhyped, don’t forget about Amazon’s retail business.
Amazon is the largest e-commerce retailer in the world and is estimated to control about 40% of all e-commerce traffic in the US.
And while Amazon’s current price-to-earnings ratio of 29x seems a little high, the last time it was below 30x was the tariff crash last April and the Great Recession in 2008.
So if you’re looking for a stock to buy, Amazon is trading at an excellent price right now.
Do you think AI is overhyped?
Coach Parker
Category: Stocks
