Key takeways from Amazon CEO's letter to shareholders
**Retail**
* Amazon retail is a $600B business, but 80% of global retail is still physical.
* Amazon is now the 2nd largest grocer in the U.S., with $150B grocery sales in 2025.
* Since adding perishables to the Same-Day network, sales in that category have grown 40x.
* Over 1 million robots in fulfillment centers.
* $4B+ committed to expand rural delivery network.
**AWS**
* AWS is at a $142B run rate, but 85% of global IT spend is still on-premises.
* AWS AI annual revenue run rate hit $15B in Q1 2026.
* The AWS Bedrock team rebuilt its inference engine (called "Mantle") in just 76 days. This new engine processed more tokens in Q1 2026 than in all prior years combined.
* Added 3.9 GW power capacity in 2025 with plan to double capacity by end of 2027.
* Management is intentionally leaning into heavy Capex now, even with short-term FCF headwinds to secure a massive FCF surplus in 2027 and beyond.
**Custom Silicon**
* Custom chip business (Graviton, Trainium, Nitro) is now $20B+ annual revenue run rate, growing triple digits YoY.
* Trainium3 is shipping now (30-40% better price performance than Trainium2) and is nearly fully subscribed.
* Trainium4 reservations rolling in despite being 18 months away.
* Custom chips are expected to save tens of billions in Capex and add several hundred basis points to operating margins vs buying third-party chips.
**Satellite Internet**
* Amazon Leo is now the 3rd largest low earth orbit network with over 200 satellites and thousands more launching soon.
* Customers include Delta Airlines, AT&T, Vodafone, NASA and the Australian National Broadband Network.
https://www.aboutamazon.com/news/company-news/amazon-ceo-andy-jassy-2025-letter-to-shareholders
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Position: Long AMZN (since 2021). NFA.