Amazon.com, Inc. (NASDAQ:AMZN) reported $62.6 billion of second-quarter net income, but that figure is a poor starting point for valuing its cloud business. The quarter included $53.4 billion of pretax nonoperating gains, primarily related to its Anthropic investment. Subtracting that pretax amount directly from after-tax net income would also be wrong. Operating earnings provide a cleaner route into the question.
At September 30, Amazon’s market capitalization was about $2.69 trillion and enterprise value $2.82 trillion. Its trailing P/E near 20 looked much lower than the operating-earnings multiple. The gap illustrates why apparent cheapness needs an earnings-quality check before becoming an investment thesis.
Amazon ranks 3rd on our list of Top 10 AI Stocks That Will Skyrocket. Check out our full list here.
Copyright: ralwel / 123RF Stock Photo
Large cloud profits can coexist with heavy cash investment. Microsoft-versus-Amazon comparison asks whether Microsoft or Amazon offers…
