u/Not69Batman ·
Reddit — r/stocks
· July 30, 2026 at 20:13
· ⬆ 408 pts
· 💬 137 comments
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AI Summary
Summary
The author presents Amazon's Q2 2026 earnings, highlighting strong revenue growth (20% YoY), accelerating AWS (36.7% YoY), and a massive net income spike driven by an Anthropic stake gain ($53B pretax).
Thesis: Amazon's core businesses (AWS, advertising, AI/chips) are booming, and the company’s high ROIC (20%) and improving margins justify a long position; next-quarter guidance remains solid.
Quality assessment: Well-researched DD with quantitative data and an explicit long position; however, the net income figure is distorted by a one-time equity gain, and free cash flow is negative.
Score408
Comments137
Upvote %98%
▶ Full Post Text
AMZN Quarterly Results (Apr - Jun 2026):
Revenue = $200.6 billion (up 20% YoY)
Operating Income = $27.5 billion (up 43% YoY)
Net Income = $62.6 billion (up 244% YoY)
Earnings Per Share = $5.75 (up 242% YoY)
Stakeholder Equity = $551.6 billion (up 65% YoY)
CapEx = $53.1 billion (up 59% YoY)
TTM Operating Cash Flow = $161.4 billion (up 33% YoY)
TTM Free Cash Flow = -$7.6 billion ( down 142% YoY)
“AWS is booming, growing 36.7% year-over-year in Q2—our fastest growth in 18 quarters—and our AI and Chips businesses each eclipsed run rates of more than $25 billion”
"And, Advertising had another strong quarter with 26% year-over-year growth."
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Return On Invested Capital = 20%
Calculation: *ROIC = Net Operating Profit after Tax / Invested Capital = (Annualised Operating Income x (1 - Tax percentage)) / (Stakeholder Equity - Cash and short term investments) = (4 x 27.5 x (1 - 0.226)) / (551.6 - 123) = 85.14/428.6 = 20%*
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Next Quarter Guidance:
Revenue between $197 billion and $202 billion, i.e. up between 9% and 12% YoY.
Operating income between $22.5 billion and $26.5 billion, i.e. up between 29% and 52% YoY.
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Position: Long AMZN (since 2021). NFA.