TacticScaleWhat Amazon.com Does & How It Makes Money (AMZN)
Updated October 2026 · reflects Amazon.com's latest reported financials
Online retail, cloud computing, advertising and subscription giant. Amazon earns money from selling products in its stores, fees from third-party sellers, AWS cloud service charges, advertising such as sponsored and video ads, and subscriptions like Amazon Prime.
How Amazon.com makes money
Amazon earns money from selling products in its stores, fees from third-party sellers, AWS cloud service charges, advertising such as sponsored and video ads, and subscriptions like Amazon Prime.
What Amazon.com does
Amazon.com, Inc., founded in 1994 and headquartered in Seattle, operates through three segments: North America, International, and Amazon Web Services (AWS). Its retail business sells merchandise and content bought for resale alongside products from third-party sellers, through online and physical stores. It also runs programs that let authors, publishers, musicians, filmmakers, Twitch streamers and app developers publish and sell their content. Beyond retail, AWS provides compute, storage, AI, database, analytics and machine learning services to developers and enterprises. Amazon also sells advertising, including sponsored, display and video ads, and offers the Amazon Prime membership. It makes consumer devices such as Kindle, Fire tablets, Fire TV, Echo, Ring, Blink and eero, and it produces media content. Its customers include consumers, sellers, developers, enterprises, content creators and advertisers.
Products & services
- Amazon.com stores
- Amazon Web Services (AWS)
- Amazon Prime
- Amazon Ads
- Kindle and Fire devices
- Echo and Ring
What is Amazon.com worth?
On an owner-earnings DCF, Amazon.com's most-likely value is about $25 versus a recent price near $262 (91% above fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$11) with a margin of safety — so the honest verdict here is “Stretched — richly priced.” Fair value earns its keep only at the extremes, not in the wide middle.
Today's $262 is above even the optimistic Bull case ($46) — the market expects faster, longer growth than modeled here. Expensive unless that extra growth actually shows up.
⚠ High leverage — net debt is 8.4× annual cash flow. Net debt is subtracted from this fair value, but refinancing at higher rates, principal timing, and share dilution aren’t modeled — the equity can be worth far less if cash flow weakens.
⚠ Capital-intensive — this business reinvests heavily, so free cash flow runs well below its earnings. Fair value here is built on free cash flow, which understates owner earnings for reinvestment-heavy companies — read it as conservative.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →