People Forget Amazon’s $600 Billion E-Commerce Business Is Bigger Than Microsoft
Amazon's e-commerce empire quietly rivals some of the world's largest corporations, yet investors keep treating it as the boring half of the business. Understanding what each division is actually worth changes everything about how you see the stock.
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Investors often forget that Amazon (NASDAQ: AMZN | AMZN Price Prediction) has $700 billion in e-commerce revenue based on its first-half revenue run rate. Since its fourth quarter is by far its largest, the number will probably exceed $750 billion. That will make the e-commerce division as large as Exxon’s (NYSE: XOM) total and larger than Microsoft’s (NASDAQ: MSFT). In fact, including AWS, Amazon was the No.1 company among the Fortune 500, having passed Walmart (NYSE: WMT) last year.
A quarter of Amazon’s e-commerce revenue is “International,” and the balance comes from what it calls “North America.” North America’s operating profit will be about $35 billion this year. International will be about $7 billion. AWS revenue will be $180 billion in 2026, based on the current run rate. Operating income will be approximately $70 billion.
Beyond size, the divisions differ: e-commerce revenue is growing at about 18%. AWS top-line growth is closer to 40%.
Amazon’s market cap is $3 trillion. It is hard, if not impossible, to say how much e-commerce contributes to that value. It’s instructive to look at Walmart with a market cap of $832 billion. Amazon’s e-commerce growth rate is much higher, so move its valuation to $1 trillion.
That means AWS is worth $2 trillion. Compare that to AI giant Anthropic, which has a market value of about $1.8 billion. Anthropic is an AI pure play, which should have about $65 billion in revenue this year. AWS’s “market cap” would be slightly more valuable than the entire market cap of SpaceX.
AWS houses most of Amazon’s AI businesses. That means they carry most of Amazon’s future and almost all of its risk. If AI is the greatest investment in human history, e-commerce is worth very little in comparison. If AI is mostly a poor gamble on hundreds of billions of dollars in data center construction, AWS may be worth very little.
Finally, there is the debate about whether Amazon should be broken into two public companies. Since the relationship between e-commerce and the cloud is relatively small, investors might be better off if they could choose between the two.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
