Executive Summary

• Stock Performance: Over the past 8 quarters, the stock moved from $180 (Mar24) to $231 (Dec25), a total return of +28%. The stock largely tracked the massive expansion in TTM OP, though it underperformed the +45% TTM OP growth due to market concerns about heavy AI infrastructure capex compressing near-term FCF.
• Revenue + Margin Trend: Revenue YoY has been stable at 9-14%, with a slight re-acceleration from 9% (Mar25) to 14% (Dec25), driven by AWS growth (20% YoY) and international expansion. Operating margin expanded from 11% to 12%, reflecting improved cost discipline in fulfillment and growing mix of higher-margin AWS and advertising revenue.
• TTM Operating Profit: TTM OP grew from $71.6B to $103.7B (+45%) over 8 quarters. However, TTM OP QoQ has been decelerating from 18% (Mar24) to 3% (Dec25), reflecting a maturing of the post-2022 efficiency gains and the impact of one-time charges ($2.5B FTC settlement, $2.7B severance in FY2025).
• Cash & Debt Health: TTM FCF/OP declined sharply from 64% to 7%, reflecting massive capital expenditure ramp for AI/data center infrastructure ($104B+ PP&E increase in FY2025). Debt/EBITDA improved from 1.7x to 1.0x, indicating strong deleveraging despite the capex surge. The FCF compression is a strategic choice, not a structural weakness.